Am I Required to Reimburse My Health Insurance When I Settle a Personal Injury Claim?

Reimbursing your automobile medical payment insurance or health insurance is probably not required when you settle your personal injury case[1]. But if you have a claim against someone, their insurance company is likely going to tell you that it does have to reimburse any of your insurers who paid your bills. If you listen to them, you will ultimately receive less money when your case is setttled.

Let’s first look at your legal obligations of reimbursement and then at why a liability insurer would tell you they have to reimburse your insurer[2].  O.C.G.A. §33-24-56.1 http://law.justia.com/codes/georgia/2010/title-33/chapter-24/article-1/33-24-56-1 controls when and if you have to reimburse your own insurer that paid your bills related to an injury claim. That law provides a very limited circumstance in which you have to reimburse your insurer. The below summarizes the three possibilites under that law:

1. You send your insurer the notice [3] required under O.C.G.A. §33-24-56.1(g) and your insurer does not respond as required by O.C.G.A. §33-24-56.1(h).  In this situation, your insurer has NO right of reimbursment as a matter of law.
2. You send your insurer the notice required under O.C.G.A. §33-24-56.1(g) and your insurer does respond as required by O.C.G.A. §33-24-56.1(h).  In this situation, your insurer may have  a right of reimbursement, but ONLY IF the insurer files a Declaratory judgment and proves that you were fully compensated.
3. You send no notice under O.C.G.A. §33-24-56.1(g).  In this situation, your insurer may have  a right of reimbursement, but ONLY IF the insurer files a Declaratory judgment and proves that you were fully compensated.

Under O.C.G.A. §33-24-56.1(b) an insurer can never recover from your settlement more than “…the amount allocated to those categories of damages in the settlement documents or judgment.” Carefully drafted settlement documents may further help insure no reimbursement is due.

In the almost 20 years since O.C.G.A. §33-24-56.1 became law, I have never reimbursed a medical payments insurer or health insurer any amounts it paid my client, and I have never had a medical payments insurer or health insurer file a declaratory judgment to try and prove my client was made whole.

So why would a liability insurer tell you they have to reimburse your insurer? Because they don’t want to evaluate whether you owe your insurer any reimbursement or not, and it’s easiest for them to pay it. It won’t increase what they pay you. They will take your agreed upon settlement amount and from that send your insurer whatever the amount of its reimbursement claim is, and you get the leftovers.

Don’t agree to reimbursement of your medical payments insurer or health insurer without talking to an attorney.  If you have any questions about this or any other issues, you can get a free consultation with one of our attorneys who specializes in personal injury law by completing the “Need Help” form or calling the phone number on the right.