What Issues come up if My Health Insurance Pays for My Medical Bills after a Car Accident?

A common concern people have after a car accident is whether or not their health insurance can be used to pay for their medical bills. The answer is yes, but sometimes there are special issues that come up.

  • The hospital may be reluctant to bill your health insurance because of contractual discounts that they provide. For example, if your emergency room physician fee's full price is $700, your insurance company may only have to pay $150. The hospital may try to avoid billing your insurance to try to collect the full amount from you personally, rather than the lesser amount from your health insurance company. Even if the hospital or doctor doesn't want to bill your insurance, usually you are better off insisting that they do so.
  • If your employer's health insurance plan provided your benefits this usually creates a lien under a federal law called the Employee Retirement Income Security Act of 1974 (ERISA). This is a "super lien" and the health insurance company may actually have substantial rights that can even trump yours. If this is involved in your case you must pay back the insurance company in full before you are allowed to have any money for lost wages, pain and suffering or even lawyer's fees.
  • If you had Medicare or Medicaid pay for services related to your car accident it can create issues similar to the ERISA lien, but with the added complication that the government isn't as responsive to negotiates. Where an ERISA lien can sometimes be resolved in a matter of days or weeks, Medicare or Medicaid liens can take months to work out.
  • If you had a non-employer health insurance company involved then there is not a "super lien", but you probably have a legal duty to reimburse them. This is called subrogation. If you fail to do so your insurance company could potentially sue you in court for these amounts. It may also be possible to negotiate a settlement with your own insurance company.

In addition to health insurance, I also recommend that you utilize any Personal injury Protection (PIP) benefits available on your own automobile insurance policy. These benefits can be used to reimburse you for the value of your medical bills, and there is usually no obligation to pay the benefits back if you are able to collect from an at-fault driver.

Anytime you have a serious accident and are thinking of settling your claim after having your insurance company pay benefits on your behalf it is always a good idea to consult with an attorney before making any final decisions. An experienced personal injury attorney can help you determine if the settlement is fair, and what steps may need to be done to keep you in compliance with any liens or subrogation issues.

For more information on using your health insurance company's benefits to pay for your injuries after a car accident, contact the Law Office of James R. Snell, Jr., LLC, today for a free consultation.

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