Minor Settlements and Health Insurance Liens in Probate Court

There are a lot of reasons that people may find themselves in probate court, and they don’t always have to do with someone passing away, or inheritances. One such reason is child settlements. By law, many case settlements (usually due to an injury that results in a lawsuit that settles over a certain amount), must be approved by the probate court via a guardianship.

That’s why anybody with a child who was injured, and who is expecting to have to sue for compensation, will likely need a probate or guardianship law attorney to help them through the process, and why so many personal injury attorneys work hand in hand with probate law attorneys in these kinds of cases.

Health Insurance Liens

But often, when a child settles their case, health insurance companies that may have paid for some of the child’s medical expenses related to the injury and the accident, will go to probate court to assert a lien — basically, they want to be paid back, for money the health insurance paid towards the child’s medical care and treatment. That money will have to come out of the child’s settlement, if the lien is in fact valid.

That’s called an ERISA lien, based on federal law, and it generally applies to any insurance benefits that stem from employment — for example, if the child’s medical care was paid for by health insurance paid or provided through mom or dad’s employment fully or partially.

Can the Probate Court Reject the Lien?

Can the probate court in Florida tell the insurance company “no — take a walk, you’re getting paid nothing?”

At first, it would seem the answer is no — federal law says that these ERISA liens are valid and that no state can say otherwise, or do anything to impede their right to assert their lien.

But more and more, courts are saying yes, probate courts can in fact invalidate or reject ERISA liens, ensuring that injured children get as much of their settlement money as possible.

A State Issue

Courts are finding that although ERISA, and the right to assert a lien over injury settlements continues to be a valid right as to adults, when it comes to minors, that may not be the case.

Many courts have found that domestic rights, such as the right of a family to settle their child’s case, or the right of a probate court to control what the minor receives, supersedes the federal law that provides these ERISA plans with their right to reimbursement.

Don’t Just Accept Their Lien

This is not a well known right. In fact, many personal injury attorneys might just assume that the ERISA insurance right to reimbursement is valid. This can lead to these liens being paid, when in fact they didn’t have to be paid, thus taking needed settlement money for an injured child, out of the child’s pocket.

Call the West Palm Beach probate lawyers at The Law Offices of Larry E. Bray today for help with your probate law or guardianship case or if you have a minor receiving an injury settlement or verdict.

Sources:

partnerwithsynergy.com/courts-authority-over-a-minors-settlement-is-not-preempted-by-erisa/

hcorporate.findlaw.com/human-resources/effect-of-outstanding-erisa-liens-on-minor-settlements.html