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It is the auto accident victim’s nightmare. You’ve finally made a physical recovery from the crash, you’ve paid off your co-pays and you’ve negotiated what you believe to be a fair settlement with the other driver’s auto insurance company. Then you get the letter from your health insurance company saying that you owe them thousands of dollars. How did this happen?

Virginia, by and large, is an anti-subrogation state. This means that most Virginians will not owe any money back to their health insurance company after they settle their personal injury lawsuit. However, if you are one of the key exceptions to this rule, you may be in for a rude awakening shortly after you settle your case.

If you are a Medicare, Medicaid or Tricare recipient; if you work for a government entity; if your health insurance plan is “self-funded;” if your health insurance plan has an ERISA clause; or if you have an out-of-state health insurance plan, you may end up owing serious money to back at the end of your case.

Taxpayer Funded Plans

Medicare, Medicaid, and Tricare plans are always entitled to be repaid.  Medicare and Medicaid will send lien notices early on in the case, but Medicare can be incredibly difficult to work with because their liens will often be overbroad and will include treatment that does not have anything to do with your auto accident.  An experienced personal injury lawyer can work with Medicare to get those unrelated charges removed.

Government Employee Plans

If you work for the federal government and have a health insurance plan pursuant to the Federal Employee Health Benefits Act (FEHBA), you are likely to owe money back to the health carrier at the end of your case.  You will need to review the health insurance plan’s language to see whether you are entitled to a credit for any attorney’s fee or for any funds paid by your own automobile insurance policy.

Virginia Employer Based Health Plans

These plans require in depth research.  Often, the health plan will send out a lien notice even when they are not entitled to any money and see whether they get repaid.  Experienced auto accident lawyers know where to look in the policy, known which questions to ask of the subrogation agents, and know how to negotiate liens that are valid or dispose of liens that are not.

Not sure whether your health plan is entitled to be repaid? Most people aren’t. The easiest thing to do is to ask your HR director at work whether your plan is subject to subrogation following an auto accident – he or she should know the answer.

Be on the lookout for any letters from your health insurance company asking for information regarding your car accident case. If you do receive something, you should forward it to your attorney as soon as possible, as this is a red flag that your policy falls into one of the above categories. The attorney cannot make the lien “go away,” but we can find out exactly what you’re going to owe before we settle your case so that you don’t get stuck with a several thousand dollar bill a month later.


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