Los Angeles Injury Lawyer Blog

A major retailer has agreed to drop their reimbursement claims against a former employee who successfully sued a trucking company for a traffic collision that left her with severe brain injuries. At the time of the accident, the 44 year old woman was an employee at Wal-Mart. The accident caused her to suffer severe brain injury, but luckily, the company’s health insurance was able to cover the medical expenses. Unfortunately, buried deep in the health plan contract, was a clause that allowed the company to seek reimbursement for expenses paid if the injured party collected monetary damages in a lawsuit against the liable party.

The accident occurred when a tractor-trailer crashed into her minivan, causing severe injuries that left her in the hospital’s Intensive Care Unit for weeks. Having lost most of her memory and ability to walk or talk, the woman requires ongoing care that will confine her to a nursing home for the rest of her life. Immediately following the accident, Wal-Mart’s employee insurance plan paid approximately $470,000 in medical expenses. In a lawsuit against the trucking company responsible, the woman was able to recovery $1 million in damages. After legal fees and other costs were deducted from the $1 million settlement, the remaining $417,000 was placed in a trust for her continuing medical care. Unfortunately, the severity of the women’s injuries will likely require at least $2 million in care and treatment over her lifetime. Even more unfortunate was Wal-Mart subsequent attempts to drain the remainder of the women’s lawsuit award by enforcing their reimbursement clause.

This reimbursement clause, called subrogation, is becoming more commonplace since a 2006 Supreme Court decision ruled in favor of the practice. The companies claim that allowing them to seek reimbursement from lawsuit proceeds allows them to keep the costs of these health insurance plans low and affordable for its employees. The counter-argument, however, is that employees pay a premium each month specifically to fund these insurance programs. If companies are allowed to be reimbursed every time, then, in effect, health care coverage acts as a loan rather than insurance. In addition, as in the case at hand, lawsuit settlements and injury awards are often insufficient to cover the full amount of medical expenses required. The trust fund in this case currently only has $270,000 left to pay for her medical expenses and nursing home bills for the remainder of her life. Allowing Wal-Mart to collect would leave the woman with nothing, and in fact, owing about $50,000 more.

Luckily, the story has a happy ending for this woman. Amid criticism from the media and other activist groups, Wal-Mart has re-evaluated its policy and dropped its reimbursement claims against the woman. While the policy still remains, Wal-Mart now has the ability to evaluate each case on an individual basis.

If you have been injured in California and are facing insurance subrogation claims against your medical expenses, you need to speak to a qualified professional. While insurance companies are only interested in recouping their expenses, we’re interested in fighting for you. Contact the attorneys at the Law Offices of Greenberg & Rudman LLP for a free consultation to see how we can help. Call 1-800-ALAWPRO (1-800-252-9776) now.