In a case handed down August 6, 2010 by the Missouri Court of Appeals, Southern District, the court found that the proposed lien of a health insurer was an invalid attempt to require assignment of the Participant's personal injury claim and, as such, it was contrary to longstanding Missouri public policy. Scroggins v. Red Lobster, No. SD 30214.
In 2007, Pamela Scroggins was seriously injured in a trip and fall accident at a restaurant. Ms. Scroggins' medical expenses were covered by an employee contributory self-funded health plan that provided benefit coverage to her under her employer provided health care plan. As a result of her injuries, Ms. Scroggins sued the restaurant and the lawsuit resulted in a settlement.
One of the health insurance plan provisions purported to grant the health insurer a lien upon the proceeds of the Participant's tort recovery, and a right to payment from any recovery, to the extent of the sum that the Insurer paid for injuries Ms. Scroggins suffered. This is not unusual. Insurers paying benefits to insureds as a result of injuries caused by third persons often claim an interest in recovering those costs if the insured obtains a settlement or collects upon a judgment against the third party. To that end, insurers have repeatedly attempted to draft policy provisions or establish other requirements for the purposes of seeking reimbursement from the insured in such situations.
The Southern District summed up their decision as follows: "The Participant paid for health care coverage. The Insurer was obligated to provide those benefits regardless of whether the Participant pursued her personal injury claim. Missouri courts have never allowed a provider to be reimbursed for medical expenses that the insured recovers in a settlement from a liabile third party under a lien theory, and we decline to do so now."
Insurance coverage disputes and requests for reimbursements from health insurance carriers can be complicated and the results may differ depending on the type of policy. This particular plan was not subject to the Employee Retirement Income Security Act of 1974 ("ERISA"), because the Insurer was a religious institution and a non-profit corporation and, as such, the Plan is a church plan. 29 U.S.C. Section 1001, et seq. (2006); 29 U.S.C. Section 1002(33)(A) (2006); 29 U.S.C. Section 1003(b)(2)(2006).
If you find yourself in a dispute with your insurance company, it is important that you seek legal advice from attorneys who understand this complicated area of the law. The attorneys at Tatlow, Gump, Faiella and Wheelan, LLC, represent seriously injured clients and often those clients are denied benefits to which they are entitled, by insurance companies that are supposed to have their best interests in mind. We will work closely with you to recover those benefits to which you are entitled.