Do You Report to a Potential Lienholder?
When an attorney begins her case, the law firm has (hopefully) already asked the plaintiff about his health insurance. The attorney then asks herself; I need to tell this health insurance it may have a “lien” right? Here’s how to make that decision.
First, recall that the term lien is generally a misnomer. Take a look at our Lien Resolution 101 blog post that explains most of these legal rights are either subrogation, contractual, or statutory rights of reimbursement, or both. These legal rights are much stronger than a lien because they exist regardless of the health insurer’s activity and effort.
Second, look at your state’s laws. Anti-subrogation states do not allow subrogation or reimbursement. Certain states require contractual language to create the rights (“Non-Equity States”). But state laws have limitations. Federal law can preempt those state laws. This preemption means that ERISA, Medicare, military (like VA or TriCare), Medicaid, FEHBA, and a few other potential “lien holders” have inextinguishable rights.
Each of these points goes to an analysis of whether you should reach out to the health insurer. When you aren’t sure, the safest answer is to reach out. At worst, you will use your state’s laws to help extinguish the so-called “lien.”
Join MASSIVE’s Partners, Ryan Weiner, Esq. and Marcy Spitz, Esq. for discussions on various lien topics at the Michigan Association for Justice (MAJ) First Annual Summer Convention on June 7, in Grand Rapids, MI.