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I was injured in an accident and my medical bills were paid by my private health insurance company. If I decide to sue the party responsible for my accident and injuries, what happens to the payments made by my insurance company?


A: It depends. In general and in most accident situations, under Pennsylvania law, if you receive private health insurance benefits for medical bills incurred as a result of an accident and then later receive a settlement, you must reimburse your health insurance company, if that company asserts a subrogation interest in the case. In some rare instances under Pennsylvania law, a health insurer will not be able to assert such an interest.

What normally happens is that after a person receives health insurance benefits for an injury, the insurance company sends a letter to ask about the injury and whether there is a lawsuit or attorney for a third party case against the person/entity that caused the injury. If yes and a settlement eventually occurs, the insurance company is entitled to be reimbursed for the payments it made for the medical bills.  However, the exact amount the insurance company receives is negotiable and depends on the costs of the case and lawyer's fees.

In New Jersey, the collateral source rule results in the opposite of what occurs in Pennsylvania. Under this rule, a private health insurance company cannot assert a subrogation interest in any third party case. This means that if you are injured in an accident in New Jersey and receive health insurance benefits for your medical bills, the private health insurance company cannot assert a subrogation interest in your case.

However, ERISA (Employee Retirement Income Security Act), Medicare and Medicaid benefits must be reimbursed. That is because ERISA and Medicare are federal laws which preempt Pennsylvania/New Jersey state law. Medicaid benefits under either Pennsylvania or New Jersey law must be reimbursed.  

Talk to an experienced Pennsylvania and New Jersey personal injury lawyer who can talk to you about your rights if you've been injured in an accident.  We represent accident victims in all areas of Pennsylvania and New Jersey.  1-877-944-8396

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