Erisa Plans: Could They Affect My Car Accident Settlement?

Yes. An ERISA plan is a health insurance plan which can claim part of your injury settlement. An ERISA plan will claim reimbursement after a car accident settlement for the medical bills it paid.

This Area of the Law Is Complicated.

The term ERISA comes from the first letter of the actual name of the federal law, the Employee Retirement Income Securities Act. The federal law passed by the Federal Government in 1974, sets the floor for employee benefits for those covered.  As the name implies, there are lots of different provisions in the law. The one rule we are talking about here is called subrogation. Subrogation is the legal term which means the group that pays your medical bills initially may get reimbursed out of your settlement.

I Thought Kansas Law Did Not Allow Health Insurance Subrogation.

Since ERISA is a federal law it preempts or overrides state laws on the same subject. So, for example in Kansas there was a regulation that prevented subrogation from health insurance companies.

K.A.R. 40-1-20 says, No insurance company or health insurer, as defined in K.S.A. 40-4602 and amendments thereto, may issue any contract or certificate of insurance in Kansas containing a subrogation clause, or any other policy provision having a purpose or effect similar to that of a subrogation clause, applicable to coverages providing for reimbursement of medical, surgical, hospital, or funeral expenses.” Kan. Admin. Regs. 40-1-20.

This regulation does not stop an ERISA plan from taking part of your settlement because they are not exactly insurance companies and because the federal law preempts the state law.

Do I have an ERISA plan?

If you have health insurance through your employer, it is likely an ERISA plan. Get a copy of your plan language and make sure it has a subrogation provision. Your plan administrator name and address will be found on the health insurance paperwork your employer gave you. If the plan doesn’t have the language, it can’t issue a subrogation. Most plans now have the right language.

You can negotiate with the plan. Most plans will lower the amount of the claim if an attempt is made to negotiate the amount. When and how much a claim can be lower varies from plan to plan.

Share this post

Need Help?

Free Case Evaluation

Before you sign anything, get your case evaluated for free.