In a recent decision, the Perry County Common Pleas Court held that an employee health insurance plan can maintain a direct action against the insured’s automobile insurance carrier. In Perry County Health Plan v. State Farm, Case No. 15-CV-0219, the employee’s health plan paid medical expenses incurred by the insured arising from an automobile accident. The driver of the vehicle did not have auto insurance, although the injured person carried uninsured motorist’s (“UM”) coverage through State Farm.
The health plan pursued subrogation and reimbursement from State Farm, under the UM coverage, for the medical expenses paid by the health plan. State Farm refused to acknowledge the health plan’s right of subrogation, arguing that only the insured could pursue a claim under the insured’s UM coverage with State Farm. State Farm argued that it has no obligation or duty to the health plan, such that the health plan could not pursue a direct claim under the UM coverage.
The Court agreed with the health plan, holding that the subrogation provisions in the terms of the health plan afforded it the opportunity to pursue a direct action against State Farm, on behalf of its insured. This is a great win for subrogation!
CLICK HERE to read the decision.