When your personal injury case is finally settled, there is usually a sense of relief that washes over clients. That relief is usually short lived for many clients though because they receive notices from their health insurance that they must pay back the expenses for their medical treatments related to the accident. Many clients wonder why this happens and if it is legal or not. I spoke about this topic a bit in my blog.  However, in this article we’ll discuss the specifics of health insurance liens and when you are responsible for reimbursing your health insurance.

What is a Health Insurance Lien?

When you sign a contract with your health insurance provider, you agree to reimburse your medical provider for any bills that were caused by a third party. This applies to you if the driver who is deemed to be at fault is not you. Because this is in your health insurance contract, you are responsible for paying back your health insurance once your case is settled. This applies to Medicaid and Medicare as well.

How Does a Health Insurance Lien Affect Me?

There are many problems that can arise from health insurance liens. In some cases, the settlement amount may not cover paying back your health insurance. If this is the case for you, you won’t have enough money to be adequately compensated for your injuries and losses in the car accident.

The good news is that some health insurance companies are willing to negotiate the amount that you must pay back. Your lawyer can handle the negotiation and possibly settle so that you do not have to pay back the full amount of your medical expenses.

Unfortunately, there are some health insurance policies that do not require them to negotiate the reimbursement with you. These plans are called Self-Funded ERISA plans. It’s a good idea to check if your health insurance has one of these plans because they can negatively affect your negotiation down the line.

Let’s Recap

Health Insurance liens are not fun, but you are legally obligated to respond to them. The contract that you sign with your health insurance provider ensures that they will be reimbursed for any injuries that are caused by a third party. These liens can be negotiated unless your healthcare provider has what is called a Self-Funded ERISA plan. In those cases, your lawyer may still try to negotiate, but it is more difficult to lower the reimbursement.

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