In a personal injury case, there are many steps involved before you finally obtain a settlement. Dealing with insurance companies, the stages of the lawsuit, and finally, negotiations can be a drawn-out process. But you’ve finally made it to the end, you’re ready to collect your check and move on – only to find out that your employer paid for your medical expenses related to your injury under a Federal law called ERISA. Now wants you to pay them back. This is called an ERISA lien, and it’s far more common than you might suspect.
What is ERISA?
ERISA stands for the Employee Retirement Income Security Act of 1974. This act protects the rights of employees and their beneficiaries who participate in benefit plans provided by employers. Before ERISA, worker benefits were subject to varying and sometimes conflicting state laws. It sets and protects standards of conduct over millions of health and retirement plans that 141 million workers rely on for benefits.
There is an important distinction between traditional health insurance and the health benefits that are covered by ERISA. Rather than the patient paying a monthly premium, like with an insurance plan, health benefits under ERISA pay all the patient’s medical expenses up front, except for the occasional co-pay. The employer sometimes negotiates directly with the care provider to get reduced costs for such services. This is based on the number of employees using the benefits. If you’re not sure whether you have health insurance or health benefits you can visit Free ERISA to find out, or ask your human resources representative.
What is an ERISA Lien?
If an employee with health benefits governed by ERISA later recovers damages from another party or as a result of a case that isn’t covered by worker’s comp, the employer may have a right to recover the money, dollar-for-dollar, that they spent on the health care. The same rule would apply to an insurance company, but with different limits. Health insurance companies must take less money based on fees and other charges that might reduce the actual amount of a settlement. However, employers with ERISA benefits have the right to recover the full amount they paid for the treatment. This happens even if that means taking the full amount the injured person is awarded.
If you were injured due to negligence in Indiana and have medical bills, you should find out if your policy is governed by ERISA before starting the civil claims process. You need a lawyer who is experienced in these nuances and can give you advice in your best interest. We can also, in many cases, talk to the insurance company in order to negotiate the amount of the lien. The Indianapolis personal injury attorneys at Cline Farrell Christie & Lee want to help you get what you need to move forward in life with peace of mind. From listening to your story to fighting for you in court, we’re your advocates. Contact us today for a free consultation.