Subrogation refers to the right of a “third-party” to be reimbursed for benefits the entity paid on your behalf when another party is deemed responsible by the court. Subrogation is also known as “the right of recovery” or “the right of reimbursement.”
For example, in a case where the insurance company denies liability, you may have to seek payment of your medical bills through your major medical insurance carrier, like BlueCross and BlueShield. BlueCross and BlueShield would then have a “subrogation interest” in your case.
Subrogation is a complicated area of law and can have a huge impact on your case. Subrogation works differently in Minnesota workers’ compensation than in personal injury cases. Also, if you have a work comp and a personal injury claim arising out of the same incident, then the work comp insurance carrier may have a subrogation interest in your personal injury case.
While subrogation law is both layered and nuanced, knowledgeable and experienced attorneys use subrogation interests to their advantage while negotiating settlements. The attorneys at Meuser Law Office use our knowledge of subrogation and the coordination of benefits to our clients’ advantage. This three-part series on subrogation in the contexts of work comp, civil actions, and third-party claims will examine the impact subrogation has on a variety of claims.
Workers’ Compensation and Subrogation
Third-parties with a financial interest in a workers’ compensation case have a right to intervene in litigation under Minnesota Statute § 176.361. The intervenors must file an application to intervene, which means that the third-parties are asserting their interest in the litigation based on benefits or monies paid to or on behalf of the injured employee. The intervenors do not have an independent right to bring a claim for reimbursement against the work comp insurance carrier. The intervenors themselves cannot file a claim petition for reimbursement within the work comp system. Freeman v. Armour Food Co., 38 W.C.D. 445, 380 N.W.2d 816 (Minn. 1986). But, they can become a party to the litigation after a claim petition is filed.
The Minnesota Workers’ Compensation system allows intervention in order to prevent multiple forms of litigation, prevent the employee from doubly recovering, encourage prompt payment of benefits by the insurer for injuries not arising out of employment, and to ensure the burden of work comp injures falls on the work comp insurer, not the private health insurance industry. Bramscher v. City of Perham Police Dep’t¸ slip op. (W.C.C.A. Feb. 27, 1995).
Courts historically have protected the rights and interests of third-party payors in the context of workers’ compensation law. The parties have an affirmative obligation under Minnesota Rule 1415.1100 to notify all potential intervenors in a workers’ compensation action. These potential intervenors include private and public sources that paid wage loss or medical benefits to or on behalf of the injured employee.
Attorneys should ask their clients who has paid for medical treatment of if they have received wage loss benefits or medical benefits of any kind and it’s very important for clients to let their attorney know who has paid benefits on their behalf. Failure to provide notice to an intervener or excluding an intervenor from settlement negotiations may nullify a settlement agreement and has negative impacts on claims. Claims and settlements can become delayed as a result.
Coordination of Benefits in Workers’ Compensation
Injured employees must also be cognizant of the coordination of benefits in workers’ compensation claims. Sometimes injured employees may be able to receive work comp benefits along with other types of monetary benefits, although typically these other benefits are reduced in accordance with the amount of benefits you may be receiving from work comp. The benefits that are coordinated in conjunction with work comp benefits include: benefits from social security, PERA benefits, MSRS benefits, and short-term and long-term disability benefits in accordance with the language of the policy. Not all short-term and long-term disability policies allow coordination of benefits. Unemployment or other types of public assistance programs that are mutually exclusive do not permit double recovery.
Contact the knowledgeable attorneys at Meuser Law Office, P.A. today for a free one-hour consultation of your workers’ compensation, personal injury, PERA or MSRS claim. Subrogation is a complicated area of the law. Our experience in the intricacies of the law surrounding subrogation, especially the interactions between subrogation in cases with both civil and work comp claims, allow us to maximize your recovery.