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Allen, Flatt, Ballidis & Leslie, Inc.

Have you been injured in an accident? If your employer's health insurance company has paid your medical expenses, it may also seize the compensation you receive from the accident settlement as reimbursement, leaving you with nothing. Find out how to protect your settlement.

While riding to work one day, a young motorcyclist was struck by a car after it suddenl y pulled out from a nearby curb. After two years of lost wages, five surgeries, and over 200,000 dollars in medical expenses, his health insurance company demanded the entire 100,000 dollars he received after settling his accident case with the person who hit him. With no consideration for the compensation he would need for lost wages, pain and suffering, and futures medical bills, the insurance company—citing recent case law—sought to seize his full settlement, prompting the accident victim to seek legal aid from the California Injury Lawyer

Cases of unjust insurance practices similar to this one have become increasingly prevalent, explains the California Injury Lawyer. Despite attempts by many states to protect the rights of citizens, the Federal Government has had a tendency to favor insurance companies: established in the 1960s, the Federal Employee Retirement Income Security Act, or ERISA, outlined the rules for health insurance offered by employers. In many cases, ERISA has overridden state laws. Even more troubling is the precedent set by recent U.S. Supreme Court rulings in which insurance companies have been allowed to include provisions in their policies that entitle them to the insured’s full accident settlement, regardless of debts incurred from lost wages, pain and suffering, or compensation needed for future medical expenses. 

After over 35 years as California injury lawyer, I have witnessed the recent increase in aggressive insurance practices firsthand. When the young motorcyclist came to me, it was clear his health insurer was being unfair, for his medical and accident related expenses were hardly covered by the negligent party’s insurance policy. He would have been left with nothing if the insurance company had its way. After asserting that seizing the accident victim’s entire settlement would not only be unjust but would incite public censure of the company, we were able to negotiate, ensuring that the young man would reserve compensation for his lost wages and future medical expenses. 

With the soaring cost of medical care, insufficient automobile insurance policies, and aggressive health care insurers, accident victims must be more cautious than ever before. Before resolving your accident case with the other party, negotiate the amount of reimbursement your health insurer will receive from the settlement. If your health insurance company continues to demand your entire settlement, expose them to the media. The threat of public criticism may persuade them to compromise. 

Under current ERISA law, accident victims have little recourse when dealing with unjust insurance companies. The legal process necessary to protect even a portion of an injury victim’s accident settlement is difficult and complex. Contribute to change by petitioning your Representative and Congress in favor of the “Common Fund” model, under which the insurance company and the accident victim are both entitled to a portion of the settlement contingent on the total damages suffered by each party. Under the Common Fund model, if you incurred 100,000 dollars in medical bills and 200,000 dollars in additional damages but only received 15,000 dollars from the accident settlement, the health insurer would be entitled to 1/3 of the 15,000 dollars—instead of the entire amount. 

Protect your settlement after you have been injured in an accident. If the insurance company refuses to negotiate, an experienced California Injury Lawyer will advocate for you. 

James Ballidis is a California Injury Lawyer and the author of several books about injury and claim settlement law. If you would like to request a copy of one of his books or need legal advice, call 866-981-5596 or visit the California Injury Lawyer

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