One thing that most HR people aren't aware of is that medical plans can ask for documentation from any third party action (that's a lawsuit for all my plain English friends), related to settlements that might be used to pay medical expenses.
Why? Let's say you are involved in a crash with a drunk driver, and as part of the insurance settlement, the drunk driver's insurance provides a settlement that includes $$ for your medical care. From the insurers point of view, if there are other funds available to pay your claims, it's in their best interest to force you to utilize those funds.
I see requests for documentation flowing through our plans at least once a month. That type of process is alive and well in plans that are self insured, as well as fully insured.
Of course, it's best to ask for clarification before the claim is paid. If you try and go back after the claim is paid, it's like asking someone to dig into their own wallet to pay the claim, regardless of the terms of the settlement. The Blue Cross networks I've worked with are pretty sensitive to the negative press that can go along with this.
Then there's Wal-Mart - for every step it takes forward to repair its image, it seems like it takes two steps back. Like this one, where the big retailer is seeking 470K from a brain-damaged ex-employee's trust fund. CNN.com has the details:
"Debbie Shank suffered severe brain damage after a traffic accident nearly eight years ago that robbed her of much of her short-term memory and left her in a wheelchair and living in a nursing home.
It was the beginning of a series of battles -- both personal and legal -- that loomed for Shank and her family. One of their biggest was with Wal-Mart's health plan.
Eight years ago, Shank was stocking shelves for the retail giant and signed up for Wal-Mart's health and benefits plan.
Two years after the accident, Shank and her husband, Jim, were awarded about $1 million in a lawsuit against the trucking company involved in the crash. After legal fees were paid, $417,000 was placed in a trust to pay for Debbie Shank's long-term care.
Wal-Mart had paid out about $470,000 for Shank's medical expenses and later sued for the same amount. However, the court ruled it can only recoup what is left in the family's trust.
The Shanks didn't notice in the fine print of Wal-Mart's health plan policy that the company has the right to recoup medical expenses if an employee collects damages in a lawsuit."
Good call on Wal-Mart's part? I report, you decide. Here's one stat I'll provide. Wal-Mart earned about 348 billion in revenue in 2007. So what's 470K come to as a percentage of revenue? Maybe some of my economics friends can run the numbers in the comments.
Now say you are running a HR shop at a company with 100M in revenue. What would a proportional claim be to your plan?
I'd say most of us would walk away from that because of the internal PR damage alone.... Especially if we had to go back to the employee after the fact, once the claim had already been paid...