When your client is injured and comes to you for help you both might be hyper-focused on just the workers’ compensation claim and miss the fact that your client’s medical bills were paid by his or her health insurance company, that they have a possible short- or long-term disability claim or have been paid short- or long-term disability benefits. The group health carrier and the disability carrier or plan will want to be reimbursed when you win or settle the workers’ compensation claim. These issues won’t go away.
Generally, disability policies and plans are governed under the Employer Retirement Security Act (ERISA), and it behooves you to understand the ERISA disability claim and subrogation and reimbursement claim process.
There is greater variety with health insurance. Don’t forget that health insurance comes in many flavors that may not be governed by ERISA. There are private non-ERISA group health plans, Medicaid, Medicare, TRI-Care, and the Affordable Health Care Act/Obamacare and each has its own subrogation and reimbursement provisions.
Deal With Disability Claim and Subrogation Issues During Your Initial Consultation
Not only do you need to be an active listener, but you also need to be an active questioner during the initial client consultation. You should ask:
- Did you get any medical treatment that was paid for by your health insurance company?
- If so, do you have a copy of the bill and documentation of any payment you made?
- Have you gotten any letters from your group health carrier asking if this treatment was the result of a workers’ compensation accident?
- Do you have short or long term disability coverage?
- Can I see your paycheck to check for a payroll deduction for short or long term disability benefits?
- Have you been paid any short or long term disability benefits?
Not asking these questions is a malpractice trap. If the answer to any of these questions is “Yes” it is time to roll up your sleeves because there is a disability insurance claim and/or subrogation and reimbursement issues that are better dealt with now and not in mediation.
You must first decide if you are going to handle the short or long term disability claim or refer the case out. How about the group health subrogation issue? Are you going to handle or refer out for resolution?
The amount of any disability benefits or group health bills can impact whether you even want to take the workers’ compensation claim. These liens can make the workers’ compensation case worthless and conversely leave you in a difficult position when you explain to the client that they must pursue, under the terms of the disability or group policy or plan, a workers’ compensation claim.
Don’t forget to address the impact these liens can have on your workers’ compensation attorney’s fee and be sure that your contract of representation addresses these issues. Yet another potential malpractice trap.
Requesting Disability Policy or Plan and/or Group Health Carrier or Plan Documents
There are two ways of getting documents. You can ask your client to contact their HR department for a copy of the plan documents or you can get a copy of the plan documents. If ERISA is applicable, the plan documents must be provided within 30 days of written request, or the Plan Administrator can be sued for up to $110 per day under 29 U.S.C. § 1132(c)(1); 29 C.F.R. § 2575.502c-1.
Be sure to ask for the plan documents, the Master Plan document, if they have one, and the summary plan description (SPD). The SPD is not the controlling document unless it is incorporated into the plan. There is no right of subrogation or reimbursement in the ERISA statute and the right to the same must be in the plan.
You should also ask the Plan Administrator and any insurance company for all the documents related to any claims that have been made, including documentation of the payment of any medical bills.
Once you get these documents, read them cover to cover. Pay particular attention to provisions about subrogation, reimbursement, and other income. These provisions will tell you how the disability or health carrier or plan will treat workers’ compensation benefits, the extent of their subrogation or reimbursement rights, the notice that must be given of any settlement, and the proration, if any, of workers’ compensation benefits or a settlement. Also note what might be excluded from any right to subrogation or reimbursement.
Requesting and Filing A Short and Long Term Disability Claim Form
There is no uniform short and/or long term disability policy or plan. Many STD plans are self-insured and self-administered or administered by a third party administrator. Once again, have your client ask the employer for the short term disability or plan documents and claim forms so a claim can be timely filed.
STD benefits are typically paid for 26 weeks, Some but not all disability policies or plans will not pay benefits if the client is collecting workers’ compensation, while other will deduct the amount of workers’ compensation benefits paid. Other policies or plans will pay STD and then seek reimbursement or subrogation. Another malpractice trap!
There are times when the STD benefits will be denied or terminated just as the benefits transition into long term disability benefits. The long term carrier or plan just might tell the client they can’t file a long term disability claim because they have not been paid out all the STD benefits. If that is the case, a timely filed appeal is appropriate as is filing a claim for long term disability benefits. Yet another malpractice trap.
Now that we have set the stage, does the disability or group health plan or policy have the right to reimbursement and, if so, does it really have the right language to allow them to recover?
In my next article, I will answer these questions and give you insights on possibly ways to challenge the right to subrogation or reimbursement that can influence your decision to even take the workers’’ compensation case with tips on how to fight back and maximizing a workers’ compensation settlement.
This series will conclude with my suggestions for a crafting a successful settlement of a workers’ compensation case when confronted with subrogation and reimbursement issues.
If your client has a short- or long-term disability policy, call our office at 727-894-3188 for a policy review.
Nancy L. Cavey, Esq. Cavey www.caveylaw.com 727-894-3188
Nancy L. Cavey is a nationwide ERISA disability attorney with over 40 years of experience helping disabled individuals obtain the disability benefits they deserve. Throughout her career, she has dedicated herself to representing clients in complex disability claims, including ERISA Disability Claims, and Long-Term Disability Claims.