The Ohio General Assembly has passed a new law regarding the rights of subrogated insurance companies. Subrogation simply means that your health insurance company stands in your shoes and has a right to be paid back whatever it paid toward your medical bills. This applies in an auto accident case when you are settling your claims with the at-fault insurance company.
Under Ohio law, your health insurance company has a right to be paid back the amount of bills that it paid for you out of your settlement. Many plans provide for repayment in full, even if that means that the injured party receives very little or nothing. Obviously, this is a very unfair situation for injured persons in the state of Ohio. When you are hurt in an auto accident and it comes time for settling or resolving your case, most of your recovery could go to your health insurance company instead of you.
Recognizing the unfairness of this situation, the Ohio General Assembly passed a new law, effective 09/29/2015, which requires your health insurance company to participate in the settlement with you on a pro-rata basis. If you receive less than the full value of your claim due to comparative negligence, low insurance limits on the part of the wrongdoing party, the inability to collect your judgment from the at-fault party, or any other cause, your health insurance company’s interest in the settlement is diminished in the same proportion as your interest has been diminished.
In other words, if the injured party is not made whole by the settlement, your health insurance company is also not made whole. This new law creates fairness and a better balance between the competing interests of the injured party and the subrogated health insurance company. In effect, this new law will allow injured persons in Ohio to receive more money when they settle a case than they could prior to the effective date of this new statute.
This new law is very good news for people who are injured in Ohio due to the negligence of others. We are grateful to the Ohio General Assembly for recognizing the need to protect the rights of the injured to achieve full and fair compensation. We all owe a debt of gratitude to the Ohio Association for Justice for its efforts in bringing this matter to the attention of our lawmakers.