If you have health insurance, you are fortunate. However, if you work for a large, multi-state employer, a recent Supreme Court ruling could prevent you from recovering compensation for your damages if you are injured in a car accident.
How is that possible, you wonder? Well, the Supreme Court of the United States has just reaffirmed the ability of a federally regulated ERISA health plan (Employee Retirement Income Security Act) to write a contract that requires you pay the plan back every dime they paid out in benefits, which can include every dime you receive from the person that crashed into you. It doesn’t matter that you didn’t really read the plan when you signed up for it. It doesn’t matter that you didn’t really have any bargaining position to change the terms of the plan (I call it a “take it or leave it” plan). And it doesn’t matter if you are declaring bankruptcy. The sad reality is that often, people that work for large, multi-state employers are frequently unable to take a settlement and recoup their lost wages or pay for future deductibles and co-pays because of the draconian language of their health plans. For the ERISA insured, health benefits are a loan against third-party recovery; in this context, this means that the ERISA insured are worse off than those with state-regulated health insurance.
However, all is not doom and gloom. You should know that if you prepare, you still may be able to recover in the case of a third-party injury. You don’t have to end up like Wal-Mart’s most famous victim of their ERISA plan, Debbie Shank. Just make sure that you have more than ample insurance coverage. Years ago, I switched from a split-limit, $100,000/$300,000 policy to a single limit $500,000 policy (including Uninsured/Underinsured Motorist Coverage) and my rates went down. They could for you, too. In addition to high automobile limits, I recommend you purchase an umbrella policy. With this extra insurance, you will preserve your ability to recover your damages in spite of the harsh terms of the contract you likely never read and almost certainly never negotiated.
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