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Ben Glass
Ben Glass
Attorney • (703) 584-7277

Your Health Insurance May Only be a Glorified Loan

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Most people believe that if they are in an accident their health insurance will pay the bill, acting as an insurer. In most cases, however, the health insurance company is only loaning you the money, to be repaid if you recover that money in an lawsuit. So, for example, you are in a car accident and incur $25,000 of bills. Your health insurance company pays. You later recover $100,000 for your injuries from the negligent driver’s insurance company.

Today, in most cases, you must then reimburse your health insurance company what it paid. This is the law of subrogation. Even if your state has a law prohibiting an insurance company from subrogating to your accident claim, that law may be overridden by the federal law of ERISA. This can be complicated but here’s the teaching point:

You must ask your lawyer: are any of the funds you are recovering for me subject to reimbursement to my health insurance company. Only when you know this answer will you know what your “bottom line” is in your settlement negotiations.

I discuss this in my book, The Five Deadly Sins That Can Wreck Your Accident Case. It’s free for Virginia residents.