Employees in Chicago currently suffering from a condition commonly find themselves involved in an auto accident, or some other accident where a third party caused them injuries. Often, these prior conditions may be aggravated by the accident. If you have health insurance coverage, and you’ve already been receiving treatment for the condition, the waters become murky in determining what portion of the care related to your prior condition before the accident, and what portion is attributable to the accident.
Health Care plans covered by the Employee Retirement Income Security Act (“ERISA”) often file a lien for reimbursement and subrogation in the injury lawsuit, or send a letter to the plaintiff’s attorney. After the Supreme Court decided Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356, ERISA plans have been more aggressive in pursuing such purported liens, resorting to suing the injured parties and even seeking attorneys fees for doing so. The Sereboff Court, however, left more questions unanswered than it answered. Thus, rights of plans to reimbursement or subrogation is not uniform and depends on numerous factors, including the language of the plan document, the manner in which the plan or policy was procured, and the state in which the policy originated. Sereboff expressly passed on answering the question of whether equitable relief under ERISA § 502(a)(3) for reimbursement of all funds expended by a plan where the injured party recovers less than the full claimed amount from the third party tortfeasor is “appropriate.” It also did not answer what happens when part of the cost of health care may be attributable to the prior condition.
Undoubtedly, a plaintiff’s injury lawyer will initially allege all possible damages, including all health care costs incurred following the accident. However, only as the case gets closer to settlement are concessions made that some portion of the medical expenses relates to the prior condition for which the plaintiff already was receiving treatment. But plaintiffs often settle these cases for less than the amount originally demanded, and then find out the insurer wants reimbursement based on the entire amount of medical expenses originally claimed as damages. These exact circumstances presented themselves recently in Rotech Healthcare Inc. v. Huff, 2011 U.S. Dist. LEXIS 23100 (C.D. Ill. Mar. 8, 2011). Luckily there, Ms. Huff was armed with deposition testimony of her treating physicians which convinced the Court that a large amount of the medical expenses incurred after the accident actually related to a prior condition for which she had previously been receiving treatment.
If you have suffered any kind of injury and had a prior condition aggravated, make sure your lawyer involves competent ERISA counsel before filing a lawsuit on your behalf. Not seeking advice from an ERISA lawyer could be the difference between a plaintiff being compensated for her injuries and turning over all proceeds of a settlement to an insurer.