Will I have to reimburse my health insurance expenses?

Attorney Reuben Donig: Usually the answer is yes, at least to some extent. Your health insurance can come from one of many sources. It can be a legitimate third-party health plan. It can be through your employment under what’s called a self-funded plan authorized by ERISA, the Employment Retirement Income Security Act of 1976. It can be Medicare or Medi-Cal. Those are the typical insurance plans of one kind or another that people have, if they have insurance. Sometimes in automobile cases your own a automobile policy may have health insurance as an additional provision or benefit. You almost always do have to deal with, and reimburse the plan, at least to some extent. If it’s a third-party plan, such as a Blue Cross plan, or your own health insurance, they will usually accept a reduction for what’s called procurement cost. You will have to pay an attorney and the attorney will spend some money putting your case together, so what you end up with is maybe 60 to 65% of the total settlement.

You can use that procurement cost as an argument, as a legitimate argument, for a reason to reduce what you have to reimburse your health insurance company. So if you have $5,000 of medical pay under your auto policy and you collected it or they made payments on your behalf, you can usually get satisfaction with them by reimbursing them $2,500 to $3,000. Now, Medi-Cal has it’s own rules. Medicare has it’s own formulas, and if you happen to work for a company which established a self-funded plan, they write their own rules, and those are usually the toughest and most difficult ones to deal with. They want to get reimbursed usually a 100 cents on the dollar, regardless of whether you had to pay an attorney and incurred procuring cost, regardless of whether you didn’t get a 100% of your entitlement from the other side because you were partly at fault or they didn’t have enough insurance. A self-funded ERISA plan is usually the most difficult one to negotiate with. You usually have to pay them back in full, or pretty close to in full, or you have to have a very skillful and forceful attorney making the best arguments possible to get them to reduce that plan, and it’s best to get that argument out there and get some agreement with them as soon as possible. Don’t wait until your case is settled. They’ll never negotiate at that point.

(Reuben J. Donig practices personal injury law, including car accidents, auto accidents and premises liability in San Mateo County, Santa Clara County, Alameda County and San Mateo County).