Does My Health Insurance Company Get Reimbursed In a Las Vegas Car Accident?

With the passage of the Affordable Health Care Act, almost everyone can get health insurance now. However, if you have been in a car accident and have health insurance, there are some things to keep in mind. First, you should know that if you are taken to the hospital after an accident, there may three separate bills related to your accident treatment:
    •    Ambulance bill;
    •    Hospital Bill; and
    •    Doctor at the Hospital (Doctors are usually not employees of hospitals. As a result, they send out a separate bill, over and above what the hospital charged you. This usually comes as a shock to most people.)

In most cases, your health insurance company will pay for your emergency, car accident related, medical bills. However, your health insurance company may ask that you pay the health insurance company back. They will ask you to pay them back out of the settlement proceeds from your personal injury case. This concept of paying money back to the insurance company is called ‘subrogation’.  


Nevada law allows for health insurance companies to ask your accident attorney for reimbursement (subrogation) if you have a group health insurance plan: 

Every policy of group health insurance must contain a provision which reduces the insurer’s liability because of benefits under other valid group coverage. To the extent authorized by the Commissioner, such a provision may include subrogation. {emphasis added}. NAC 689B.180 was NRS 689B.034

Except as otherwise provided by specific federal or state statute or regulation, an insurer may include in a policy of group health insurance issued pursuant to chapter 689B of NRS a provision for subrogation regarding the right of an insured to recover, ... from a third person for the cost of medical benefits reimbursed by the insurer to the insured because of injuries incurred by the insured as a result of the actions of the third person.
{emphasis added}.  NAC 689B.180

There is a notable exception to this reimbursement (subrogation) requirement. The exception is that if you were not “made whole” by the at-fault party, then your health insurance company cannot seek to get its money back from you. 

In Canfora, the Nevada Supreme Court adopted the “make-whole” doctrine, stating “[t]he make-whole doctrine ‘is a general equitable principle of insurance law’ that prevents an insurance company from enforcing its subrogation rights before the insured has been fully reimbursed for their losses.” Canfora v. Coast Hotels and Casinos, Inc., 121 Nev. Adv. 76, at pg. 9-10 (Citing Barnes v. Independent Auto. Dealers of California, 64 F.3d 1389, 1394 (9th Cir.1995). This happens when you have not received compensation for your total loss, i.e., “have not been made whole.”

Even though your health insurance company may seek to be reimbursed for health insurance benefits it paid on your behalf, your car accident attorney will make sure they are following the law and that your rights are protected.

Next time, we will discuss whether personal injury settlements are considered taxable income to you.