Wal-mart suing insurance co. that paid employee 900,000+$ for injuries suffered in auto accident?

Question

Wal-mart suing insurance co. that paid employee 900,000+$ for injuries suffered in auto accident?

Answer 1

Okay. And your question is....

Answer 2

This has been in the news for several months.

Answer 3

Yes.

Any company that considers itself to have been wronged may file a tort action.   Imagine:  Adam hires Bob to protect him, then Bob pays Charlie in an inappropriate manner.  Adam is allowed to sue Bob for making a payment which would or could affect the price Adam must pay for Bob's services.

Now imagine that Adam is Wal-Mart.  Bob is State Ranch Insurance (just a made-up name).  Charlie is the employee.

American jurisprudence at your disposal.

Answer 4

Yes that is correct.

Others have posted about this before on YA.

Here's the simple answer-- when you have an employer sponsored health plan it is called ERISA.

ALL....let me repeat.....ALL - ALL-- ALL-- ALL  ERISA sponsored health plans have a right of subrogation.  That means that when they pay out for medical bills that you incur and you get a settlement from an at fault party (tort) then the health plan has the right to be paid back from the settlement  for the medical bills that they paid.  You do not get to double dip....get the meds paid by the health plan and you get paid by the at fault party for the medical bills (which are a part of the 900,000 settlement).

The right of subrogation is what helps to keep YOUR insurance premium lower. If  you have an ERISA plan - they have the same language and will do the same thing. As a result... less money is taken out of your paycheck each month for your premium.

So, the health plan is exercising their right of subrogation.

The at fault party's attorney should have included the health plan in the settlement at the time of settlement.  Again.....because it is well know that ALL ERISA PLANS HAVE A RIGHT OF SUBROGATION.

The health plan is fully with in it's rights.  

The health plan is doing what it should do.

Here's the thing.......the health plan paid out hundreds of thousands of dollars to get this woman better......would she be doing as well as she is if they had not paid? .....would she have gotten the same medical care had she been uninsured (probably not)...............but NO ONE is complaining that her attorney was paid 400,000-500,000 of the 900,000 settlement.

So the attorney gets almost 1/2 of her money and everyone thinks that's ok?!

But the health plain which actually paid out money on this woman's behalf is supposed to be a charity and just eat that? Just completely ignore the subrogation language? This would result in every Wal-mart employee getting an increase in their premium. So every employee at Wal -Mart would - in essence- pay for this woman's medical bills through higher health insurance premiums.   Do you think every employee of Wal-Mart should pay this woman's medical bills? Most of these folks are working for minimum wage so slightly more.....do you think they should have to have more money taken out of their checks for health insurance so this one lady does not have to honor her health insurance contract? Are you willing to donate money out of every pay check you get to pay her medical bills?  

When you are injured -- the settlement gets split up between the injured person and the medical bills (either the provider or the health plan).  Same pie --- 2 pieces.

When you are injured and have an attorney - the settlement gets split up between the injured party, medical bills and the attorney.  Exact same pie --- 3 pieces (of course now the pieces are smaller).

Most likely the health plan will reduce it's lien. That means -- if they will not try to recover every thing they paid.....just a portion of it.  They will probably look to split the settlement evenly - 3 ways. 300,000 for the attorney,    300,000 for them and 300,000 for the injured person.  (At least that's how my experience with ERISA plans has been).

This is a story that is floating around trying to stir up people who know nothing about how any of this works. Wal-mart will (and should) continue to pursue their right of recovery.  

I suspect that it was put out by the lawyer who does not want to have to take a reduced cut of the money for himself.  If the pie was split 3 ways (as it should have been) instead of 2 - he gets 150,000 less for himself.