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Insurance Liens in Personal Injury Claims

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by Claudine A. Cloutier

While most people know that if you get hurt at work, you will usually be covered by workers’ compensation insurance, few people know the limitations of such coverage or that the workers’ compensation insurer has an automatic or statutory lien on any proceeds the injured person recovers against a third-party. In Massachusetts, if you are entitled to receive workers’ compensation benefits, the workers’ compensation insurer will pay you up to 60% of your lost wages based on your average weekly wage for the 52 weeks prior to your injury. The workers’ compensation insurer will also pay for any medical expenses incurred because of the accident so long as the treatment is deemed to be reasonably necessary. Workers’ compensation will not pay you for pain and suffering, generally will not cover fringe benefits — so that you may lose your health insurance coverage, and will not cover other incidental damages.

Employers are immune from lawsuits for personal injuries to their employees and employees are only entitled to receive workers’ compensation benefits. If someone other than an employer or co-employee has negligently caused the injury, the injured worker may maintain a third-party or negligence claim against that person or entity.

By way of example, if you are driving your automobile in the course of your employment and someone runs a red light and injures you, you can receiver workers’ compensation benefits and you may also maintain a negligence lawsuit against the person who ran the red light. By operation of law, the workers’ compensation insurer will have a lien on any recovery that you receive from the person who ran the red light. The workers’ compensation insurer does have to pay their proportional share of any of your litigation fees and expenses.

Health insurance operates differently from workers’ compensation. Through most health insurance policies, the health insurer has a contractual right to recover for any expenses they incurred due to the negligence of a third-party. A health insurer may also place a lien on your attorney’s file. In other words, consider a similar scenario to the one above. If you are injured because someone runs a red light and you are not in the course of your employment, under Massachusetts no-fault laws, your auto insurance will pay a portion of your medical bills and then your health insurance will start to pay bills in accordance with your health insurance plan. While you can maintain a negligence action for the injuries that you sustained including your medical expenses and any other damages against the person that ran the red light, your health insurer may recover out of your settlement or verdict for any medical bills it paid as a result of your injuries. Unfortunately, typically the health insurers do not have an obligation to pay a proportional share of your fees and expenses.

Dealing with an insurer’s right of recovery, whether it be a workers’ compensation insurer or a health insurer, can be frustrating and complicated. If you believe you have a workers’ compensation claim or a negligence claim, please contact Keches Law Group so that we can obtain the maximum net recovery for you, while addressing these liens and protecting your interests.

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