Friday, April 15, 2016

How Does Health Insurance Affect My Personal Injury Case?

Health insurance may affect your personal injury case in ways that you may have not considered. Nowadays almost everyone has health insurance, since it is required by law. However, if your health insurance paid for some of your accident related medical treatment, it is entitled to get paid back for that advance payment. What does this mean? If you settle your personal injury claim, your health insurance gets paid off the top before anyone else gets paid, including you.

Not only is your personal injury attorney required to pay your health insurance for your accident related medical treatment, the health insurance company must be paid first, before anything else is paid. There are a few legal issues that come into play, which are set forth here:

The “common fund” doctrine is an equitable doctrine that arises where a litigant or a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to reasonable attorney’s fee from the fund as a whole.  Boeing Co. v. Van Gamert, 444 U.S. 472, 478 (1980). 
The Supreme Court held in McCutchen that equitable doctrines, such the “common fund” doctrine, do not trump the clear terms of the Plan.  U.S. Airways, Inc. v. McCutchen, 133 S. Ct. 1537, 1551 (2013) (“Neither general principles of unjust enrichment nor specific doctrines reflecting those principles—such as the double-recovery or common-fund rules—can override the applicable contract.”).
Here, the policy expressly addresses and rejects the common-fund doctrine, as follows: “No court costs or attorney fees may be deducted from HMO’s recovery without the prior express written consent of HMO.”

If you have health insurance, then this law will likely apply to you. Most health insurance contracts provide that they are entitled to get paid back for any accident related medical treatment for which they paid. In plain terms, your health insurance company will be paid back first, before either you, your lawyer or your other lien medical providers, receive any funds whatsoever.

Although this may not seem fair, it is the law that your attorney must follow. However, a skilled personal injury attorney will work with your health insurance company on repayment. If you have any questions on this issue, contact your personal injury attorney for more information.

Next time, we will talk about a recent Nevada Supreme Court case holding that photos documenting the damage to your car, are admissible evidence in a personal injury trial.