Subrogation is the right of a third party, typically a health insurance company, to recover money paid on behalf of the injured party when another party should be ultimately responsible. The Minnesota laws around subrogation are based on the theories that an injured person should not recover twice for a single injury and the insurer should not be forced to make payments because of the actions of a tortfeasor, or wrongdoer. Subrogation rights can arise out of a statute, contract, or the laws of equity.

Personal Injury v. Workers’ Compensation

In a personal injury claim, the insurer claiming a subrogation interest reduces the plaintiff’s net recovery. In contrast, in workers’ compensation claims, subrogation generally does not affect the claimant’s net recovery or total settlement. But, a claimant may be responsible for reimbursing government unemployment benefits out of recovered wage loss benefits. The work comp insurance company typically handles the subrogation interests separately and negotiates with the third parties to satisfy their interests.

Personal Health Insurance Plans

After an accident, the injured person submits their medical bills to his or her personal health insurance company for payment. The health insurance company or major medical carrier may contact the person requesting additional information surrounding the incident. The major medical insurance carrier is trying to determine who is at fault for their covered person’s injuries and thereby ultimately responsible for the payment of the medical bills.