Nebraska Health Plan Reimbursement: The Made-Whole Rule

By the FigureMyTax Editorial Team · How we calculate

We did not find a Nebraska statute that governs a health plan's reimbursement from your settlement. A compendium of subrogation law reports that Nebraska courts apply the made-whole and common fund rules and that a contract cannot override them, so a plan may recover only once you are fully compensated.

What the made-whole rule is

The made-whole doctrine says an insurer that paid your bills cannot be repaid from your recovery until you have been fully compensated for your losses. Some states enact it by statute; others leave it to courts. We found no Nebraska statute for a health plan.

What a compendium reports

A law-firm compilation of Nebraska subrogation law reports that subrogation of medical benefits is allowed, that the made-whole and common fund doctrines apply, that Nebraska follows the made-whole rule so that an insurer can subrogate only when the insured has recovered more than total damages, and that contract language trying to negate it is unenforceable, citing BlueCross BlueShield of Nebraska v. Dailey (2004). We did not read the decisions, so treat these as leads.

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 your damages are $300,000 you are not made whole, so a plan subject to the rule may recover nothing. If you are fully compensated and the common fund rule applies, it bears about 36.3 percent of its claim for fees and costs and recovers about $5,730. The Nebraska medical lien calculator offers those positions.

Medicaid and provider liens are different

Medicaid has its own subrogation statute (Neb. Rev. Stat. 68-716) and providers have a statutory lien (52-401); neither depends on whether you are made whole. See the Medicare and Medicaid post and how provider liens work.

What to do

Ask for an itemized claim and the plan document, ask whether the plan is insured or self-funded, and ask it to confirm in writing that you have been made whole. A self-funded employer plan is governed by federal law.

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