According to the United States Department of Labor, the Employee Retirement Income Security Act of 1974, also known as ERISA, “is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans”. The most difficult lien that personal injury attorneys have to handle is the ERISA health insurance lien. The two types of ERISA plans are insured and self-funded. Self-funded is defined by the employer providing the plan and paying the healthcare payments with its own money. Insured is defined as being funded by an insurance company. In a personal injury case, insured v. self-funded is significant.
While it is highly unwanted, an auto accident, a slip and fall, and even an injury caused by a medical professional are all things that have potential to occur within the duration of one’s life. The expenses and long-term effects of an accident require an attorney to provide legal representation and proper compensation for your losses. Let’s say that you get into a car accident and your employer pays out $50,000 dollars for all of your medical expenses. Then your attorney negotiates a settlement for $50,000 dollars from the person that caused the accident. ERISA would require that the entire amount of that settlement be sent back to the employer to reimburse them for all of the recent expenses. This means that you will not receive any of that settlement.
So is there money that ERISA does not have access to? Yes. Personal Injury Protection, uninsured motorist coverage and underinsured motorist coverage. A PIP, also known as Personal Injury Protection, is an extension to your car insurance. In many cases it covers medical expenses and lost wages. Also, with PIP you may receive maximum benefits even if you are found at fault for the accident. This is the reason for why PIP is also known as, “non-fault insurance”. Uninsured motorist coverage, is the protection for the insured motorist in the event that an uninsured motorist is at fault in an accident, while underinsured motorist coverage is when the at fault driver’s liability limits are too low to cover the damage or medical expenses.
ERISA liens are a tricky road that personal injury attorneys have to navigate. If your health insurance plan is provided by your employer, then you are likely to be covered by an ERISA plan. If you are a victim of a car accident, seek out the professional advice of a personal injury attorney.