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Post by 502blue on Mar 19, 2008 14:58:02 GMT -5
I understand what was done, just have a few questions about this: blogs.wsj.com/health/2008/03/18/wal-mart-prevails-in-case-to-recover-health-costs/?mod=wsjcrmainFirst, I thought that an insurer took up it's case with the other parties insurer to recover the costs they spent on you. Second, don't most people sue for "above and beyond" future expenses from accidents and compensation for not being able to work? (in not so many words) Not for the medical expenses, since your insurer covered that. So, why is this case confusing to me? I do understand a person shouldn't get paid "twice" for an accident. Once would be medical expenses covered, and then they received other monies. Did they go about it wrong to get "compensation" for the injuries and shouldn't the insurer had persued their compensation directly for their reimbursement? Seems to me the original insurer didn't do their job.
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Post by tnwaltz on Mar 19, 2008 15:19:35 GMT -5
It's a damn shame and WRONG in my book, even if it is legal.
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Post by sugarcane on Mar 19, 2008 16:54:24 GMT -5
WalMart is the debil.
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Post by tnwaltz on Mar 19, 2008 18:03:42 GMT -5
Yes, they are. Horrible employers. Don't work there.
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Post by whimdriven on Mar 20, 2008 8:49:44 GMT -5
First let me say, this thread is not going to turn into a "Hate Wal-Mart" fest. The fact that it's Wal-Mart is why it made the news but its content is applicable to just about every employer under the sun.
Second, Wal-Mart is self-insured. That's important in this case. When Wal-Mart pays money for medical expenses, it's Wal-Mart's money, not an insurer's money. Pivotal difference in how this played out ...
Because it is self-insured, the company includes a first-right-of-recovery subrogation clause in its health plan. If you have an accident or illness caused by a third party and you recover damages against that third party, you are obligated to pay back Wal-Mart's money. When you work for Wal-Mart and enroll in their employee benefits program, you agree to this. Most people don't bother to read or comprehend their benefits package because they 1) want a paycheck or 2) have the "it won't happen to me" complex.
That being said, the Shanks were not obligated to sue for damages. If they had never sued for damages, Wal-Mart would have had no legal recourse to recover any funds from them, which is how an "insurance" type plan operates.
Had the benefits been 100% insured on insurer paper, such a subrogation clause might not have been in use. In that case, all the participants in the insurer's risk pool would have absorbed the expenses because that's how a risk pool works.
Wal-Mart could have managed their employee health plan in a "pooled" fashion, but these days, it's smarter for them to go for subrogation. Now they have a precedent set, and I'm sure they will utilize this precedent in the future, especially in cases where it makes sense to pursue. $470,000 is a decent chunk of change, even for Wal-Mart ...
What does this mean for you? Subrogation is very typical in insurance. In states that do not utilize "no fault" auto insurance, subrogation will allow your insurance company to recover expenses from the other party's insurer if that party is at fault. It can also allow your insurance company to sue the third party at fault in the case of an uninsured motorist.
You should read through your summary plan description if you are employed by a company falling under the ERISA umbrella. Those employed in state/federal government, schools, and churches should read any policy documentation that is available to learn whether or not your organization uses a subrogation clause.
And yes, it's up to YOU and your LAWYER to formulate an adequate damage request. It seems like, in the case of the Shanks, not enough was requested and the lawyer dropped the ball in requesting plan documentation from Wal-Mart on the subrogation issue.
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Post by 502blue on Mar 20, 2008 9:01:15 GMT -5
Ok, let me ask you this.....and no, I wasn't turning this into a wal-mart hate, I just wanted to see if this is the future and if I should be concerned in case anything like this happened to me because it was out of the norm from what I had thought I knew.
Could Wal-Mart had sued the 3rd parties insurance, or 3rd party, to recover their costs of the medical bills? If not, why not? If so, were they just piggy-backing on the injured party since a suit was in place already and they could save lawyers fees?
And if this was to happen to someone who has a subrogate clause, would it be necessary for the injured party to sue for damages and make SURE they have sued for the medical payments seperately(or at least added for this) so in case the "self insured" company didn't take up it's own suit, you would have the monies for their compensation when they came knocking?
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Post by whimdriven on Mar 20, 2008 9:29:08 GMT -5
Ok, let me ask you this.....and no, I wasn't turning this into a wal-mart hate, I just wanted to see if this is the future and if I should be concerned in case anything like this happened to me because it was out of the norm from what I had thought I knew. Could Wal-Mart had sued the 3rd parties insurance, or 3rd party, to recover their costs of the medical bills? If not, why not? If so, were they just piggy-backing on the injured party since a suit was in place already and they could save lawyers fees? And if this was to happen to someone who has a subrogate clause, would it be necessary for the injured party to sue for damages and make SURE they have sued for the medical payments seperately(or at least added for this) so in case the "self insured" company didn't take up it's own suit, you would have the monies for their compensation when they came knocking? I was referring to the intervening posters between your first post and my first post on the "Hate Wal-Mart" issue. We can start that thread in General Discussion if necessary Wal-Mart would not have had legal standing to sue the third-party's insurance or the third-party itself because it was not the direct recipient of the injuries in question. Its plan member did have standing to sue, followed through, and was given an award in excess of $700k, the prerequisite 1/3 of which went to legal fees and then some went to pay medical expenses out of pocket. Wal-Mart then used its contractual ability to recover the monies from the settlement. It's pretty much just what it looks like: the employee was used as sort of a "pawn" to have vicarious standing in the lawsuit. Well, compensatory damages should have been requested/calculated to include all outstanding medical payments (including those paid by Wal-Mart because of the subrogation clause) plus a trust fund for further enduring medical treatment. If the Shanks had sued for punitive damages (not likely against an individual, but likely would have been enforced against a company - i.e. she got hit by a truck, driver had a history of poor behavior behind the wheel or a poor MVR), Wal-Mart would NOT have been able to go after that money because it is an award of damages for personal pain and suffering, not to compensate for expenses incurred.
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Post by CoffeeShooter on Mar 20, 2008 12:15:53 GMT -5
Whim is the expert but I think this situation only proves that our system is incredibly flawed.
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Post by whimdriven on Mar 20, 2008 13:43:58 GMT -5
If anything here, I think the Shanks are most likely to be victims of legal malpractice.
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Post by CoffeeShooter on Mar 20, 2008 13:53:46 GMT -5
If anything here, I think the Shanks are most likely to be victims of legal malpractice. Sounds feasible.
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Post by Smilin' Jack on Mar 20, 2008 23:41:39 GMT -5
I think the real lesson in all of this is to make sure you get good advice from someone who knows what they're doing and has successfully done it before.
The problem for most lay people is discerning the good advice or advisors from the rest.
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Post by savagejug on Mar 27, 2008 20:22:10 GMT -5
Most large companies are now self insured. Your premium increases are based on claims history. The more claims paid out, the higher the premiums go. While WalMart may seem evil in this case. Not seeking reimbursement would be a disservice to all the other WalMart employees who pay for insurance coverage through their company plan.
That may sound cold, but that is just the nature of tthe beast.
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Post by Diremaker on Mar 29, 2008 11:13:04 GMT -5
Actually, now that I've read through everything for a second time, it makes sense. Question is now what should they have done differently to avoid this? I feel bad for the family but as Jug says, I can see Wal-Mart's, and the employee's side of it too.
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Post by bignana on Mar 29, 2008 13:08:35 GMT -5
Actually, now that I've read through everything for a second time, it makes sense. Question is now what should they have done differently to avoid this? I feel bad for the family but as Jug says, I can see Wal-Mart's, and the employee's side of it too. Basically, the lawyer should have asked for more money. I would say he/she knew what would happen and should have advised accordingly. If the lawyer did not know, he/she wasn't much of a lawyer.
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