Liens without Plan Language
Lien resolution often starts with one question: What does the plan language say? More specifically we ask if the private insurance lien (or even the ERISA lien) has contract language explaining its rules for subrogation and liens.
Every once in a while we find lien holders and health insurers who tell us there isn’t plan language. So are they entitled to the lien? Maybe!
Most states have equitable rules (default rules via common law) for subrogation, reimbursement, and insurance liens. Eight states don’t have those laws. In those eight states the plan must discuss lien rights. Otherwise, the health insurance has no right to a lien.
Those eight “Non-Equity” states are:
- New Hampshire
- South Carolina
- Massachusetts (limited to Med-Pay, life, and accident insurances)
Keep in mind the same rules from our Anti-Subrogation post.
Generally, self-funded ERISA plans, Federal Employee Health Benefit Act (FEHBA) plans, Medicare, and Medicaid can all claim a lien in these states because they follow federal law (not state law). It’s that simple.
Because it is sometimes difficult to know if a plan is Self-Funded ERISA (or FEHBA, or Medicare Advantage) prior to reaching out to the health insurance, the best policy is to review and resolve all health insurance liens – sometimes you’ll find they have no rights and sometimes you’ll find that the plan’s rights supersede state law. Take the time to go through the process. If you want expert help going through that process for any type of insurance lien please contact us.