Minnesota Health Plan Subrogation: Full Recovery First and the Fee Share

By the FigureMyTax Editorial Team · How we calculate

A Minnesota health plan may not have a subrogation or reimbursement clause unless it applies only after you receive a full recovery from another source and is reduced by its pro rata share of your costs, disbursements and reasonable attorney fees, unless the plan has its own lawyer.

The statute

Minn. Stat. 62A.095, subdivision 2 says no health plan sold to a Minnesota resident, or covering one, may contain a subrogation, reimbursement or similar clause unless (1) it applies only after the covered person has received a full recovery from another source, and (2) the health carrier's right is subject to subtraction for actual monies paid to account for the pro rata share of the covered person's costs, disbursements, reasonable attorney fees and other expenses incurred in obtaining the recovery.

When the plan has its own lawyer

If the health carrier is separately represented by an attorney, it and you may agree on the allocation of your costs and fees through your lawyers. If you cannot agree, the matter goes to binding arbitration.

What "full recovery" means

Full recovery does not include payments the health plan itself made to or for you. Nothing in the section limits a carrier's recovery rights that otherwise exist at law. A later amendment to a clause cannot be applied to your disadvantage for an injury that began before it (subdivision 3).

A worked example

Say a health plan paid $9,000 and you settle for $100,000 with a one-third fee and $3,000 in costs. If you have a full recovery and the plan has no lawyer, it bears about 36.3 percent of its claim for fees and costs and recovers about $5,730. If your settlement and other sources do not give you a full recovery, a compliant clause lets it recover nothing. The Minnesota medical lien calculator offers those positions.

Limits of the statute

Plans under state public programs are not subject to these limits but follow section 256B.37 instead. We did not read decisions on how self-funded employer plans or federal plans are treated, but federal law may displace state rules, so ask for the plan document and for whether it is insured or self-funded. See the Medicare and Medical Assistance post and how hospital liens differ.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how Minnesota's rules apply to your specific case with a licensed Minnesota attorney.