Do I have to repay my health insurance company?

Categories: Insurance

I often get asked “do I have to repay my health insurance company?”  The answer to this question is “it depends.”  It depends on whether the insurance plan is regulated by state law, or regulated by federal law.

If your health insurance plan is regulated by state law, it will be very difficult for your health insurance to share in any recovery.  Your health insurer will have to establish that the amount of the recovery is greater than your damages.  In other words, they must show that you have been completely compensated, this is known as the “Made Whole Doctrine” or the “Complete Compensation Rule.”  See Thurman v. State Farm Mut. Auto. Ins. Co., 278 Ga. 162 (2004).

However, if your plan is regulated by federal law, then ERISA (Employee Retirement Income Security Act of 1974) applies, which is not as favorable as state law on this particular issue.  More specifically, most ERISA plans contain a right of reimbursement clause which expressly gives the ERISA plan a right to share in any recovery up to the amount of benefits the plan provided. It is important to know that if the plan language is not drafted perfectly then the plan may not be entitled to reimbursement.   See Popowski v. Parrott, 461 F.3d 1367 (11th Cir. 2006).

This area of the law is very technical and must not be overlooked when settling your claim.  For years I was retained to represent many ERISA plans and now I am able to utilize my experience to make sure you do not reimburse an ERISA plan unless absolutely necessary.  We are more than happy to speak with you about your rights as they relate to this tricky area of law.