What Is Subrogation?
When an employee is injured due to the negligence of a third party, the employer or the insurer providing benefits is deemed to have a lien against the third-party action recovery. The lien covers indemnity and medical benefits paid up to the date of the third-party action recovery. In addition, the employer or the insurer is entitled to take a credit, also known as a "holiday", against future indemnity or medical benefits for the net settlement proceeds received by the injured employee. Once the credit is exhausted the claimant is entitled to further compensation benefits otherwise known as "deficiency compensation". The employer or insurer are obligated to contribute their proportionate share to the cost of the third-party action litigation pursuant to Kelly or Burns depending upon the status of the workers’ compensation claim.
Elevating Workers' Compensation Strategy
At Hamberger & Weiss LLP, we understand the complex interplay between third-party actions and workers’ compensation claims. This understanding allows us to provide expert legal advice and strategy on how to maximize our lien recoveries, credit rights and reduce our client’s exposure on a claim while attempting to effectively close the case on a final and conclusive basis. We always look at the possibility of a global settlement that closes the workers’ compensation claim, but only where it makes financial sense to the client. Over the years, we have provided seminars and training presentations to workers’ compensation and subrogation adjusters to ensure that our clients are able to recognize and effectively handle subrogation opportunities. We are the authors of the "Third-Party and Other Related Actions” section of the New York Workers’ Compensation Handbook published by LEXIS-NEXIS.
Why is Subrogation Important?
In the workers’ compensation context, the basic concept underlying third-party actions is one of fairness--that in the end, the ultimate loss from wrongdoing should fall on the wrongdoer. Subrogation is crucial as it prevents a double recovery situation whereby an injured employee receives workers’ compensation benefits from the employer and from a third party. The avoidance of a double recovery helps to maintain the fairness and integrity of the workers’ compensation system.
Subrogration/ Loss Transfer
Understanding Subrogation in Workers' Compensation
30 Years of Expertise with F. Daniel Bowers and our Subrogation/Loss Transfer Team.