Washington Health Plan Reimbursement: Made-Whole and Common Fund

By the FigureMyTax Editorial Team · How we calculate

We did not find a Washington statute that governs a private health plan's reimbursement from your settlement. A compendium of subrogation law reports that Washington allows subrogation of medical benefits, applies the made-whole and common fund rules, and lets specific plan language override made-whole.

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. Some states enact it by statute; others leave it to courts.

What a compendium reports

A law-firm compilation of Washington subrogation law reports that an insurer can recover only the excess the insured has received after being fully compensated (the Thiringer rule, 1978), that the common fund doctrine applies, that a fault-free insured must be made whole before an insurer may offset or recover (2019), and that specific plan or policy language to the contrary may override the Thiringer rule. 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 you are not fully compensated, the plan recovers nothing under the made-whole rule. If you are, the common fund rule has the plan bear about 36.3 percent of its claim, so it recovers about $5,730. The Washington medical lien calculator shows these and a clear-clause position.

Medicaid and provider liens are different

Medicaid has its own statute (RCW 43.20B.060) and providers have a statutory lien (RCW 60.44.010). See the Medicare and Medicaid post and how provider liens work.

What to do

Ask for an itemized claim and the plan document, look for clear language on made-whole, ask whether the plan is insured or self-funded, and ask it to share your fees and costs. 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 Washington's rules apply to your specific case with a licensed Washington attorney.