You were injured in a car accident in Virginia. Your auto-accident case will likely carry on for months, sometimes years, before the case is resolved. Medical bills are piling up; your vehicle was totaled or requires expensive repairs; your life has been forever changed.
But then, your case settles! The medical bills are taken care of; healthcare liens are satisfied, and you begin to settle into the routine of your new normal. But your health insurance company sent you a letter demanding repayment for what it paid toward your accident-related medical treatment. They’re demanding thousands of dollars for reimbursement of medical care. Do you have to pay it back? The answer is generally no, but it depends.
The health insurance company is exercising what’s called a right of subrogation. This means that the health insurance company wants to stand in your shoes as the injured person to receive compensation for your injuries. They are claiming that there is a right to reimbursement from settlement funds for which they have contributed.
The good news for you is that Virginia is an anti-subrogation state. So, as a general rule, the health insurance company is not entitled to any of the proceeds from your personal injury settlement. However, there are a few very important exceptions to this general rule, in which you may owe big money to your health insurance company after you settle.
1. Taxpayer-Funded Health Plans
The first exception is if you have a taxpayer-funded plan, such as Medicare, Medicaid, or Tricare. These health insurance plans are always entitled to receive reimbursement out of your personal injury settlement. However, you may not have to pay the entire requested amount. Medicare, for example, will often claim a lien on your settlement that is overbroad and includes treatment not related to your accident. You should not pay for any unrelated charges, and a personal injury attorney can work to get these charges removed so you don’t overpay.
2. Federal Employee Health Benefits Act
The next exception is if you are a government employee with a health insurance plan under the Federal Employee Health Benefits Act (FEHBA). If you fall into this exception, you’ll need to review your plan’s language to see if you are entitled to a credit for any attorney’s fees or for any funds paid by your own automobile insurance policy, but you’ll likely owe money at the end of your case.
3. Virginia Employer-Based Health Plans
These types of plans will often send you a lien notice even when they are not entitled to any of your settlement money. This is where an experienced personal injury lawyer can help! Here at Osterbind Law, we have the knowledge and experience to negotiate the valid liens and dispose of the invalid liens.
If you receive any letters from your health insurance company asking for information about your car accident case, you should forward the letter to your attorney ASAP. We can help you find out exactly what you’re going to owe before your case is settled to ensure you’re not later blindsided by a serious bill.