People injured by drunk drivers or tractor-trailer drivers often have their medical bills paid by their healthcare benefits plan. On the one hand, this means that the bills are taken care of, no matter what happens with the claim against the other driver. On the other hand, the injured person might have to pay back (reimburse) the entity that paid his or her medical bills. Why is that?
From a general standpoint, an employer sponsored healthcare benefit plan is a contract between the employer and its employees. A plan of this type outlines what benefits the employee can elect to have and who will pay for the benefits. Years ago, Congress enacted the Employee Retirement Income Security Act, commonly called “ERISA,” which sets out the minimum obligations imposed on an employer and the minimum terms that must be in a plan. Other than what is required by ERISA, the employer can put any other terms it wants into a plan. Unfortunately, ERISA is a convoluted and complicated piece of legislation that gives lawyers and judges fits when we try to figure out what it means. As a result, the plan language can, and often is, also wildly convoluted and hard to understand.
There are different ways that an employer can arrange for the payment of employee bills. One way is for the employer to put money it collects from its employees and the employer’s money into a pool that is used to pay medical bills. Another way is for the employer to use money from the employees and the employer to buy an insurance policy from an insurance company.
If the employer puts money into a pool (which is called a “self-funded” plan), then the employer, by law, is given more leeway to demand reimbursement of medical bills than an insurer is given. It is common for employers to include language that requires an employee hurt by another person to pay back every penny of what the employer pays toward the employee’s medical bills. If the employer buys a health insurance policy, then the insurer can include the same language, but the insurance company’s right to reimbursement is limited by Georgia law. Georgia law is much more restrictive on what the insurance company might get back, but it does not apply to plans where the employer puts the money into a pool.