Anti-Subrogation: When Health Insurance has no Lien Right
Subrogation rights can be limited by state law. In fact, eight states are considered “Anti-Subrogation” states with one more effectively anti-subrogation. Those states are:
- Arizona
- Connecticut
- Kansas
- Missouri
- New Jersey
- New York
- North Carolina
- Virginia
- Georgia* – essentially anti-subrogation through a strong made whole doctrine that cannot be overridden by contract language
Most simply, anti-subrogation means that state law does not allow subrogation, reimbursement, or liens even if the plan language says otherwise.
Certain federally protected insurance types will preempt state law – they are allowed to claim liens. Those insurance types include ERISA, Medicare Part C/D, TriCare (Military), and FEHBA. The plan’s contract language generally applies in that circumstance. However, in those exceptions to anti-subrogation, the underlying law (Medicare/Medicaid/TriCare) or contract (ERISA/FEHBA) likely must state a recovery right.
I live in an Anti-Subrogation state, do I have to put health insurers on notice?
The answer is likely yes. It is far safer to reach out to a health insurer to determine its lien rights, than to ignore it and hope it has no such rights. For that reason, you may want to become comfortable reading health plan contracts to understand when those rights take effect. Generally, the subrogation rights and reimbursement rights exist without any proactive actions by the health insurance. The only question is whether state law applies anti-subrogation, or perhaps the plan is actually an ERISA plan, preempting that state law and allowing the lien.
Take care to protect your clients by proactively determining these anti-subrogation rights.