What is subrogation and do I have to pay it?

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Often times my clients will have their medical bills paid by either PIP or health insurance. At the end of the case, when compensation is recovered from the at fault party, the insurance company that paid your bills is entitled to be paid back. The reasoning is that it wasn’t their fault that you were injured, but they paid, so when you collect from the person whose fault it was they should be reimbursed. Washington law, however, provides for a reduction in the amount that those subrogated insurance companies must be paid back. In other words, if PIP paid $1, you don’t have to pay them back $1 when you collect from the at fault party, you get to pay them back less. The reduction can change based on various factors, but it is usually more than 1/3.
This is true of both PIP and health insurance as long as your health insurance is not an ERISA plan. ERISA is a federal law that many larger companies use to establish health care. Unfortunately, if your health insurance is ERISA based, then you may have to pay them back dollar for dollar for any benefits they paid.

It is much easier for me to explain subrogation verbally than in writing. If you have any questions, please contact me.

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