Do Work Comp Insurance Carriers CHEAT Workers On Subrogation?
What Personal Injury Cases Are At Issue?
If you are hurt on the job in Alabama, you are likely entitled to work comp benefits. What if you were hurt because someone else was also negligent? You still have a work comp case. If the negligent person was a co-worker, that’s probably all you have. With a few limited exceptions for things like intentional conduct, your employer (and co-workers) are immune from claims outside workers compensation.
Sometimes, the negligent person is a third-party. That is, the negligent person did not work for your employer. If you are hurt due to the negligence of another person (outside your employer), you may also have a separate personal injury claim to recover your damages. In these cases, you likely have BOTH a work comp claim and a negligence claim against the third-party.
Many of our cases involve this scenario. What are some common situations where workers have both a work comp claim and a separate third-party negligence claim? Delivery drivers injured by a negligent driver while on the job. Construction workers injured by the negligent acts of another subcontractor on a work site. These are two very common scenarios we see all the time. Whenever your job requires work around people outside your company, these scenarios can occur.
While your injury may create two separate claims (work comp and third-party), the two claims have many overlapping parts. Because of this, your lawyer should be experienced in handling both cases. Many injured people hire a lawyer who handles one of the claims but not the other. That’s a mistake that can cost you in the long-run.
How do these cases overlap? Medical treatment is one example of overlap. If you are hurt on the job, workers comp benefits include medical treatment. Your employer (through its insurance company) should provide you an authorized doctor. That’s a great benefit. At the same time, your injuries are the key issue in your third-party case. That includes the cost, treatment and recovery for those injuries. So, your medical care (provided through comp) greatly impacts your third-party case. Another overlap on damages relates to lost wages. Work comp provides a percentage of your lost wages in the form of temporary total disability benefits (TTD) while recovering or in the form of permanent disability benefits if your injury results in permanent impairment. In your third-party case, your damages include all your lost wages. So, your disability is an overlapping issue in both. For these reasons, you need a single attorney who handles both claims. Also, many injured clients who hire separate attorneys end-up paying more in legal fees and costs!
Here is the big topic for today. In these scenarios, your employer (through its work comp insurer) will likely pay medical and disability benefits. If your employer provides these benefits, it has certain rights to repayment from any judgment or settlement against the third-party. These rights of repayment are often referred to as subrogation or reimbursement. This is a major reason why your lawyer needs to understand both types of claims. You can lose or save a lot of your settlement money on this issue!
What Are The Insurance Company’s Rights To Reimbursement?
You were hurt on the job. You received workers compensation benefits. Then, you sued a negligent third-party and received a settlement. What happens? In this situation, the Alabama Workers’ Compensation Act specifically provides employers (and their insurance companies) with the right to be reimbursed for the compensation benefits paid.
Again, this is why you want a lawyer who fully understands both claims. A lawyer who understands BOTH claims can best maximize your total money recovery.
Let’s look back at the law. Our law provides work comp with the right to recover compensation benefits it paid. Generally, work comp benefits include (1) medical benefits which are payments to medical providers for your treatment; and, (2) disability benefits directly to you.
Here’s where some insurance companies try to take advantage of you! Instead of seeking reimbursement just for compensation payments (medical and disability benefits), they add other payments into the total. What types of payments? Here are a few common examples. The work comp carrier pays an investigator to follow you for weeks or months. They add this bill to the reimbursement claim. The work comp carrier pays a case nurse to travel and attend all your medical appointments (basically a spy in the doctor’s office for them). They add this bill to the reimbursement claim. The work comp carrier pays some administrative company to process and handle all the paperwork. They add this bill to the reimbursement claim.
Basically, the work comp carrier tries to make you pay all its overhead out of your settlement. Worse yet, the insurance company is trying to make you pay the costs it expended trying to defeat your comp claim. That’s absolutely wrong. What should you do?
What Steps Should You (Or Your Attorney) Take?
Did the work comp carrier add amounts to its reimbursement claim? Many lawyers simply accept at face value the dollar amount claimed by the insurance company. I’m convinced that many attorneys simply accept the insurance carrier’s reimbursement claim without taking a closer look. Why?
Many states have reimbursement laws similar to Alabama. In a recent case from another state, a work comp carrier sought reimbursement of approximately $469,000.00 from a third-party settlement. Yet, when the injured plaintiff’s attorney discovered the actual payments, he learned the carrier had hired a company to administer medical benefits and that approximately $190,000.00 of that total was pure profit to the administrator. In other words, the amount claimed contained almost $200,000.00 for which NO reimbursement was due. How many attorneys simply accept the number claimed by the insurance carrier without question? How many injured plaintiffs lose settlement money because of that?
Instead of simply accepting the amount claimed, make the insurance carrier provide a print-out of its actual payments. Make the insurance carrier prove how and why it is claiming a certain amount. Look at the actual payments which make-up the amount of reimbursement claimed.
In our cases, we always make the carrier provide a print-out of payments. That print-out should show all the payments, including the exact medical charges paid and the exact disability payments made. Through the years, we’ve saved our clients lots of money by reviewing and disputing work comp reimbursement claims. We believe this dedication is important to our clients and to maximizing their recovery.
At the Blackwell Law Firm, we help people across Alabama following a serious personal injury. We are dedicated to seeking the maximum compensation available for our injured clients.