An employee who is injured on the job may receive payment through workers’ compensation without the need to file a lawsuit. However, employees may be allowed to file lawsuits if the injury was caused by a negligent third party (not the employer) or if the employer did not carry workers’ compensation insurance. In either case, any party that has made some payment toward your injury has the right to recover the money spent on the accident, also known as a right of subrogation.
What Is Subrogation?
Subrogation is a legal term that means “substituting one party for another.” For example, when you file an injury claim, you are seeking payment from an at-fault party’s insurer, rather than the individual. Similarly, one insurer can seek repayment from another insurance company if their customer is ultimately found to be at fault for an accident.
For example, let’s say you are hurt in a work accident and your employer is a non-subscriber. You receive benefits through your spouse’s medical insurance to pay for medical costs. After you recover, you file a lawsuit against the employer and win. Now, your spouse’s insurer has a right to ask you to pay back the amount it has spent on your injury out of your damages.
How Does Subrogation Affect My Injury Case?
While subrogation can affect the amount of damages you receive, it also has the potential to strengthen your case. If one of the companies who paid your injury costs knows you are filing a lawsuit against a negligent party, they are going to want you to win your claim because they could share in the damages. Your attorney should pay careful attention to determine whether your providers have a subrogation interest.
Parties who may file a subrogation claim include:
- Worker’s compensation insurers. The state workers’ compensation provider is allowed to collect some or all of the benefits that it pays to victims for lost wages and medical costs.
- Health insurance providers. Health insurance contracts often have a subrogation clause in their policies that requires repayment from successful settlements or a verdicts in a personal injury claim. Usually, insurers cannot subrogate until the employee has reached maximum medical improvement.
- Disability insurers. If you were unable to work during the filing of your claim, your disability insurer may file a subrogation claim for the income replacement benefits you collected.
- Medicare or other government benefits. You may have to pay back a portion of any federal- or state-sponsored benefits you received during your recovery.
It is important to note that there are special subrogation rules for employee death claims in Texas. This is vital for families filing a single lawsuit that includes both a survival action and a wrongful death action against an at-fault party. A survival action is filed on behalf of the deceased employee, but a wrongful death action is filed by the survivors of the deceased.
In Texas, insurers can only subrogate claims of an insured person, not an insured person’s family member. As a result, workers’ compensation insurers can only file subrogation claims for damages received in a survival action, and have no right to any portion of proceeds from successful wrongful death cases.
Subrogation is a long and frustrating process that can take months to complete. Providers and insurers will often perform their own investigation to estimate how much is owed to them for injury and wage loss costs, and will use their own legal team to maximize the amount they can be reimbursed for providing benefits. If you are considering filing a work injury lawsuit and you have received public or private insurance benefits, our attorneys can help. We can calculate the full costs of your losses, including how much your injury will cost you in the future and the pain and suffering you have endured, and we do not charge anything unless we win your case. Contact the Packard Law Firm today to tell us more about your case in your free, confidential consultation.