Subrogation is a fancy legal word describing the right of an insurance company to get money back. It can apply in several different ways in a workers’ compensation claim.
If a workers’ compensation claim has been denied, and medical bills are paid by private health insurance, that insurance company has a right to get their money back from the workers’ compensation insurance company if the injured worker eventually wins their claim. This is solely an issue between the two insurance companies, determining which one is obligated to pay the medical bills.
There is, however, a second type of subrogation does affect the injured worker’s benefits. If the injury is caused by the negligence of a third party, the injured worker may have two claims: a claim for workers’ compensation benefits, and a separate negligence claim against the party who caused the injury.
The workers’ compensation insurance company has a right to get some or all of their money back from any settlement or award of damages against the negligent party. There are three reasons for this:
- A negligent party should not escape liability to pay for damages they caused.
- An employer/insurer should not be liable to pay for damages that were caused by somebody else.
- An injured worker is not permitted to receive a double recovery for a single incident.
Based on these reasons, the Workers’ Compensation Act and many, many court decisions have determined that the insurance company’s right to subrogation (to get their money back) is ABSOLUTE. This issue was recently explained, and Affirmed by the Commonwealth Court of Pennsylvania in January, 2022 in Kamp v. Green Acres Contracting Co. (WCAB).
The manner of calculating the amount of subrogation to be paid back is based on complicated mathematical formulas. The goal of the injured worker’s lawyer is to maximize the amount of benefits ultimately paid to the injured worker. This goal is best accomplished where a single law firm handles all elements of the claim. In this situation, the attorneys are working together for the best interest of their client. Where different attorneys or law firms handle different parts of the case, each separate firm may be trying to maximize the value of “their claim”, which often results in less money to the injured worker when both parts of the claim are considered. For this reason, when you are injured by a third party while at work, it is best to seek representation that can handle both workers’ compensation and personal injury claims.
Schmidt, Kirifides & Rassias is a “full-service” law firm. Our certified workers’ compensation specialists and extremely well-recognized personal injury attorneys work hand-in-hand for the best interest of our clients. For a free consultation, call us at 610-601-5399 or contact us online.