In 2011, Bryan Stow was badly beaten by a pair of angry L.A. Dodgers fans who resented Stow wearing San Francisco Giants clothing to a Dodgers game. He suffered serious, lasting injuries, including loss of part of his skull and brain damage. He is still in a wheelchair, can’t control his bodily functions and requires continual care.
Although a Los Angeles Superior Court jury awarded Stow $18 million from the Dodgers and his assailants last year, because of subrogation laws, he will eventually only receive a portion of that amount.
What is Subrogation?
It’s important to understand subrogation laws, as they can apply in many personal injury cases. Subrogation, in the context of a personal injury claim, is a health insurer’s right to be reimbursed for benefits paid when an injured person obtains a recovery from an at-fault party.
The extent to which a health insurer is entitled to be reimbursed is governed by the plan’s language.
Since Stow’s award is greater than the amount his provider Envision Healthcare has paid for Stow’s healthcare as a result of the incident, he will still receive some of the money he was awarded in his court case. However, some of his award will go directly to the Dodger’s insurance company, even before Stow is paid.
“Subrogation is the norm in these cases, but what’s so shocking in this particular case is the fact that after likely aggressively defending the matter in court and not offering enough money to achieve a settlement, the Dodgers, in effect, silenced the jury’s award by going behind the back of the Plaintiff and purchasing the plan’s subrogation rights for fifty cents on the dollar. This effectively saved the Dodger’s $1.8M and reduced the jury verdict by that amount,” says Bill Tonelli of Dellecker, Wilson, King, McKenna, Ruffier & Sos.
Fair Use of Subrogation Rights
Federal laws allow health insurance companies to assert a lien to be reimbursed in personal injury cases when there’s a recovery, and people who pay premiums for health insurance should be aware of that.
“Many people don’t realize their health insurance plans contain subrogation clauses,” explains Tonelli. “At our firm, we let our clients know about subrogation up front so they won’t be surprised down the road,” he says. “Responsible citizens are penalized for having health insurance, paying their monthly premiums, and taking all of the risk to hire an attorney when they get injured, while the health insurance carrier sits on the sideline and waits for a recovery to recoup their money for free, without taking any risk.”
When Subrogation Doesn’t Apply
The majority of group health care plans are governed under ERISA (Employee Retirement Income Security Act) and subject to subrogation, but there are certain health care plans that aren’t subject to full subrogation. For example, Obamacare plans under the Affordable Care Act are non-ERISA and not subject to full subrogation.
If a Florida plan is not governed by ERISA, then Florida state law applies pursuant to Fla Stat. 768.76 to determine the actual amount of the lien. The court must consider a host of factors in determining the actual lien amount including, but not limited to, comparative negligence of the claimant, limitations in the amount of liability insurance coverage available to the at-fault party, or any other mitigating factors which the court deems equitable and appropriate under the circumstances. Further, the lien must be reduced by its pro rata share of costs and attorney’s fees incurred by the claimant in recovering money from the at-fault party.
“It’s important that the attorney handling a personal injury case knows the current status of subrogation laws and how they may affect their client’s claim,” Tonelli says.
If you have a claim and want to understand how subrogation laws could impact you, contact the attorneys at Dellecker, Wilson, King, McKenna, Ruffier & Sos by calling 407-244-3000.
Bill Tonelli of Dellecker, Wilson, King, McKenna, Ruffier & Sos is a member of the Florida Bar, the Orange County Bar Association and the American Bar Association.