If you have a personal injury claim, you may receive notices from your health insurance company stating that you owe them money. This can be confusing since we all expect our health insurance to cover our medical expenses. So why are you getting these notices? 
Your Health Insurance Company’s Right to Subrogate
When your health insurance pays for your medical treatment, and you later settle a personal injury claim for those injuries, your health insurance is entitled to subrogation. Put simply, subrogation means that your health insurance is entitled to be reimbursed for expenditures made on your behalf when another person is at fault for your injuries, and you collect payment from that person or their insurance company. The “bill” from your insurance company is called a “lien.”
There are a few important things to know about subrogation and health insurance liens.
Navigating Health Insurance Liens and Subrogation
Your health insurance company can only be reimbursed for proceeds received from the at-fault person or their insurance company. This means that you do not have to pay your health insurance company back if you do not receive a settlement. However, your health insurance company may pursue the at-fault person independently if you do not receive a settlement. If your insurance company chooses to pursue a claim, it is important that you cooperate with your health insurer.
Your health insurance company may only subrogate against medical bills related to the accident. For example, if you see your eye doctor for your annual visit while you are still receiving treatment from an orthopedic specialist for injuries, your health insurance company could collect reimbursement for the orthopedic specialist’s bills but not your eye doctor’s bills.
How to Handle Health Insurance Liens After a Personal Injury Settlement
If you receive a health insurance lien, your health insurance company may be willing to negotiate the lien to a lower amount. Some health insurers are willing to agree to accept a lower amount than they actually paid for your care to settle their subrogation claim. However, not all plans will allow this. For example, ERISA plans have additional protections under the law and may not agree to any reduction. If your health insurance company agrees to accept a lower amount, it is important to have the agreement in writing.
Failure to pay your insurance company back in this situation can have serious consequences, including losing your health insurance. An experienced attorney can help you navigate health insurance liens and help you settle the lien for a lower amount.
