Georgia Injury Law Blog

Commonly, insurance policies include an endorsement which provides the insurer “will pay reasonable expenses incurred for necessary medical and funeral services because of bodily injury caused by accident and sustained by an ‘insured.’”Medical payments coverage for car accidents is optional under Georgia insurance policies and is available to the insured regardless of fault.These endorsements typically provide for recovery up to a certain amount for a certain amount of time, generally three years.Furthermore, the insurance carrier must pay benefits within sixty days of the demand by the insured who has suffered a personal injury in a car accident.

The question of who is covered under a medical payments endorsement for medical bills incurred due to a personal injury in a car accident is set out by statute.OCGA § 33-34-2(1) provides: “Coverage shall be available to the named insured, resident spouse, and any resident relative while occupying the covered motor vehicle, and to any other person legally occupying a covered motor vehicle.”

Individuals injured in automobile accidents should look to their health insurance carrier for payment of their medical bills first, as coverage is provided under contract with the health insurance carrier.The injured should then look to the medical payments carrier which will pay funds directly to the injured party and will reimburse the injured insured for any out of pocket expenses not paid by the injured insured’s health insurance carrier.It is important to remember that most automobile policies contain notice provisions which will also apply to medical payments coverage and in all cases, the injured insured should notify their own insurance carrier as soon as possible.

In 2001, auto accident injury victims received what was thought to be good news from the U.S. Supreme Court in Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002). In Knudson, the Plaintiff was injured in an auto accident. Her medical bills related to injuries sustained in the auto accident were paid by her ERISA health insurance plan. Upon settlement, the settlement proceeds were paid into a special needs trust. The Plaintiff’s ERISA plan attempted to obtain reimbursement directly from the Plaintiff for the medical bills the health insurance carrier paid for treatment related to the auto accident injuries. The Knudson Court ruled that the plan had no right to reimbursement since such payments would constitute enforcement of a legal remedy, something not allowed under ERISA.

However, through Sereboff v. Mid Atlantic Medical Services, 547 U.S. 1015, 126 S.Ct. 1869 (2006) and its progeny, the Supreme Court illuminated the fact that the Court will not interpret every plan as seeking a prohibited legal remedy.  The Court will look to the plan language on a case by case basis to determine whether the plan creates an equitable remedy – specifically, whether a fund has been specifically identified by the plan language, and if so, to what part of the fund the plan will be entitled to recover reimbursement. The plan’s right to reimbursement will fail if the plan itself fails to create a lien by agreement, by “specifically identifyi[ng] a particular fund, distinct from [the plan beneficiaries’] general assets. . . and a particular share of that fund to which [the plan] was entitled.”