The Cassidy Law Firm Blog

Wednesday, August 25, 2021

Can My Health Insurer File a Lien Against My Personal Injury Claim?

You have reached a resolution of your personal injury claim! Congratulations! Accepting a settlement deal or getting that judgment returned in your personal injury trial can be very exciting and a big relief. Now come the logistics of distributing the proceeds from your claim accordingly. Much of your settlement will likely go towards paying off medical bills resulting from your injuries. It is, after all, a basic tenant of personal injury law that, if you are harmed by the negligence of another, that individual or business should be held responsible for compensating you for, at a minimum, the medical expenses resulting from your injuries.

What happens, however, if your health insurance has paid for medical treatment related to your accident injuries? Do they get to seek reimbursement for the expenses paid that should have been covered by the at-fault party in your personal injury action?

Can My Health Insurer File a Lien Against My Personal Injury Claim?

A lien, or subrogation interest, refers to a third party’s right to reimbursement directly from your personal injury settlement or judgment. If a health insurer paid for medical expenses related to an injury caused by someone else, then it is often within their power to place a lien on your personal injury award seeking reimbursement for what they paid out. The health insurance policy itself, however, must state that such a lien is permissible.

A health insurer has a right to place a lien on personal injury proceeds because it has been determined that another party has been held responsible for the person’s injuries and, thus, is responsible for compensating for financial losses related to receiving treatment for those injuries. A personal injury claim is, after all, a means to set things right and to put the plaintiff in a financial situation comparable to the one he or she enjoyed prior to the accident and resulting injuries. Without the health insurer’s right to reimbursement, the injured party would be compensated for financial harm already covered by the health insurer, resulting in a “windfall.”

When a health insurer files a lien in a personal injury claim, the health insurer asserts its right that it should get that portion of the recovery because it paid the medical bills and not the injured party. As a result, you or your attorney may be required to pay the health insurer lien through the subrogation process. Especially with the assistance of your attorney, it may very well be possible to negotiate the lien down so that it is less than the amount that was actually paid by the insurance company. In that case, you could pay less than the lien amount and still be released from the lien. This would result in you being able to retain more of the personal injury claim proceeds for other expenses.

New Jersey Personal Injury Attorneys

Dealing with insurance companies, health insurance companies, and other bureaucracies can be a real headache. Let the team at the Cassidy Law Firm handle the red tape while you focus on your recovery. Contact us today.

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