If you have ever been injured in an accident, you likely needed to use your private health insurance to cover the costs of treatment. Most, if not all, insurance companies want to be reimbursed for all of the money that they have paid on your behalf related to the accident – they look for reimbursement once you start a lawsuit. They send letters to you or your attorneys claiming they have a right to be paid back. Where would this money come from? Too often, it comes from your settlement and it means less money in your pocket.
Governor Paterson signed into law a bill which limits the reimbursement and subrogation rights of health insurance providers. The law is found in New York State General Obligations Law, section 5-335. The new law provides that if you settle an action for personal injury, medical, dental or podiatric malpractice, or wrongful death, the health insurance provider shall have no lien, or right of reimbursement or subrogation, against you or your settlement.
There are a few exceptions to this new law. For instance, if you have a health insurance plan that is governed by ERISA, this law may not apply. The law will not apply if any of your treatment has been paid by Medicare or Medicaid. Also, the law does not apply to additional personal injury protection (APIP) benefits covered through your motor vehicle insurance carrier.
Remember: If you have been involved in an accident and your health insurance provider has requested reimbursement, contact your attorney. They will be able to determine whether your insurance provider is covered by this new law.