I was asked by a potential client if she will have to repay her medical insurance company when a claim is settled.
The basic scenario is this: A person is injured in a car accident. The health insurance company pays the medical bills. The person settles their claim and receives compensation for the medical bills that were incurred and paid by the health insurance company. Do you have to pay back the health insurance company?
The answer is an absolute clear maybe. Your health insurance plan has a subrogation or reimbursement clause in it. That clause basically says that you have to pay them back if you receive money from a settlement for something they paid. Simple enough. But, and there had to be a but, if you have health insurance from your employer, your plan is an ERISA plan. Then the rules may be different.
There are cases that say an ERISA plan cannot sue you in state court. There are also cases that say an ERISA plan cannot sue you in federal court. However, there are also cases that allowed the ERISA plan to recover. Currently, the US Supreme Court has decided to review a case with this same issue. A ruling should come in 2007.
Until then, you are best to ask your attorney for advice based on cases in your jurisdiction.