What do health care insurance policies, such as Excellus Blue Cross Blue Shield, and others, have to do with New York personal injury settlements? Maybe nothing. Maybe. Let me explain.
If you are an insomniac in need of sleep, you might decide to pull out your health care insurance policy and read it. I guaranty that it will put you to sleep, and probably even before you get to the part, buried deep within it, that says the insured (that’s you) agrees that should you get injured through the fault of someone else, and get a settlement or a judgment against that other person, you will have to reimburse the insurer (that’s them) for all the medical costs they paid for treatment of your injury.
In other words, say a dog bites you, you sue the owner, and then settle with the dog owner’s homeowner’s insurance for $100,000. But Blue Cross Blue Shield has paid $10,000 in medical bills related to the dog bit. BCBS will claim a “lien” or a “right of subrogation” against the settlement to the tune of its $10,000.
We New York personal injury lawyers for years fought the health care insurance lien. It did not seem fair to us that our clients, who had paid heavy premiums for their health care insurance, should have to hand over some of their settlement to them. It seemed the health insurer was double-dipping. It seemed like a hold up. New York case law, however, generally upheld the liens.
Then, last year, advocates of the injured won a big legislative victory in Albany. New York General Obligations Law section 5-335 (“GOL 5-335”) abolished health insurance liens against personal injury settlements, with some exceptions. Here are the main exceptions: It did not abolish liens asserted by Medicaid, Medicare and ERISA (Employee Retirement Income Security Act) policies. Those are governed by Federal law, so New York’s legislature had no power to upset those apple carts.
But nothing is simple. In the wake of GOL 5-335, several health care insurers now claim to be bonafide “ERISA”-protected policies when in fact they are not. They will try to assert a lien against your settlement even though they are not entitled to one.
Before you settle your case, your New York personal injury attorney is duty-bound to investigate whether a claimed “ERISA” health care lien is in fact valid. Experienced New York personal injury attorneys have learned where to look, and how to investigate, the validity of claimed ERISA-protected liens. There are website listings that help, but often the attorney must ask the self-proclaimed “ERISA” insurer for its “Summary ERISA Plan Description”, and other documentation, to see whether it is a valid ERISA plan exempt from New York’s new anti-lien law (GOL 5-335). If there is any doubt whether a health insurance policy is part of a true ERISA plan, and thus can assert a lien, court intervention may be needed.
By the way, even if there is an ERISA lien, your attorney should be able to negotiate it down. Generally, at least one third should be deducted as the health care plan’s fair share of attorneys’ fees.
The complexity of these lien issues is just another reason you need a good, experienced New York personal injury lawyer.
Email me at: firstname.lastname@example.org I’d love to hear from you!
Michael G. Bersani, Esq.
Central NY Personal Injury Lawyer Michaels & Smolak, P.C.