Employees in Chicago now have even more reason to know about employer-provided health plans and their rights to reimbursement and subrogation. Should you experience any type of accident or injury caused by another party, you may need to use your own health insurance to cover the medical expenses incurred from the accident until obtaining a settlement from or judgment against the party causing the injury. Invariably, the health insurance company or fund will demand reimbursement for any expenses it covered that were caused by the other party. Following Great-West Life & Annuity Insurance Co. v. Knudson and Sereboff v. Mid Atlantic Medical Services, Inc., plans have become particularly aggressive in seeking such reimbursement. Nobody previously considered your own health plan making a claim against your own automobile insurance policy, though. But that might change after a recent decision from the Sixth Circuit Court of Appeals in Shaffer v. Rawlings Co.
The Shaffer court rejected an employee’s claim that ERISA prevented her health insurance provider from enforcing its reimbursement and subrogation rights by demanding funds from the employee’s own auto insurer before she had even recovered from any third party for her injuries. The court also rejected the argument that ERISA 502(a) would prohibit the enforcement of a subrogation provision, noting that section 502(a) applied specifically to judicial remedies, not substantive or contractual remedies like a plan’s subrogation provision. Ultimately, the fact that an employee does not have possession of the funds does not impede the collection process.
Plans nationwide will likely start to take the sort of action that Ms. Shaffer’s employer just did. If other jurisdictions follow the Shaffer decision, this could mean that the unfortunate repercussions related to a car accident may only be further aggravated in the event that an employee has had to have his or her health plan advance money to cover the resulting medical expenses. If you are unsure whether or not your plan provides for an enforceable subrogation agreement in the event of an accident or if you are simply interested in better understanding the rights of both you and your insurer in the event of a non-work related accident, speaking with an ERISA attorney is always a good idea.