I just looked it up. Wal-MArt is a self-insured employer.
Keith Olbermann has mentioned this story on his program Countdown on both Thursday and Friday (and promised to keep bringing it up until Wal-Mart changes its mind). When he first brought it up, he mentioned that the clause requiring reimbursement is common so many other companies might have done the same thing (and been legally entitled to do so). But Wal-Mart, as a large retailer, is especially vulnerable to looking bad.
If I were the management of Target, I’d make a point of making the woman whole, just to embarrass Wal-Mart.
I direct my outrage more at the fact that out of a one million dollar settlement, the family only got $470,000 after legal fees. What the hell?
I don’t know the amounts involved, but it sounds as though maybe the problem is that the Shanks weren’t awarded enough money in their suit against the trucking company. Anyone have a more informed take on that?
(I guess I like to think of jurors sitting around the table calculating, "So, health insurance coverage that needs to be returned was this much, legal fees will be this much, and they’ll need this much money to reasonably care for her for the rest of her life, so altogether, that’s [total settlement award]. Probably not that straightforward, sadly.)
The last place I worked had this as part of the insurance agreement, but in the 12 years I was there (in HR and benefits), we never attempted to collect any reimbursement from employee settlements. I don’t know if this was company policy or if management didn’t want the hassle.
I never heard about the insurance company doing it either. Self-insured, administered through Blue Cross.
I asked about it once and the manager said “We don’t do that.” I don’t know if it was policy or if we were just incompetent. Or lazy.
It sounds like the settlement wasn’t big enough. There should have been enough to reimburse the medical expenses that Wal-Mart had paid and leave enough for her continuing care. A million isn’t much for a catastrophic injury.
I am pretty sure that jurors are not told about insurance coverage amounts or legal fee amounts and are instructed not to consider them.
I think he’s saying that it’s crazy that Walmart gets the money (whether it’s legally entitled to it or not) when it’s a drop in the bucket to them, while the Shanks are stuck with a monumentally larger expense to suck up, relatively speaking, with or without the settlement money.
I could (reluctantly) support Walmart’s side if this were money left over after all expenses were paid for. But as has been pointed out, she’s going to need continuing care–not only that, but it would seem that a large part of the money is already gone for that reason. They have far more use for the settlement money than Walmart does.
Just because something is legal doesn’t mean it’s right.
“It amazes me that anyone can defend Wal-Mart’s actions in this case. Some folks seem determined to defend corporate greed just like they consistently vote against their own interests.”
I’m not a Wal-Mart fan, but I think this repayment clause is very, very common.
I agree with this.
I also agree that it is pretty standard for health insurance policies to be written to exclude coverage for something that someone else is liable for, such as auto insurance or worker’s compensation. From that perspective, I can’t say I fault Wal-Mart for this. They could have been truly evil and fought the claims all the way as something the trucking company or its auto insurer was liable for.
I also think the trucking company should have had to pay the legal fees. You’d think any lawyers worth said fees would have thought to ask for that.
But that is what the settlement is for and if she doesn’t have enough money to pay her future bills, her lawyer did a piss poor job. IANAL but I know future medical bills are estimated by the physician and should be negotiated into the settlement.
I review med mal and personal injury suit from the heatlhcare perpective as part of my job and I have never seen a case that past and future medical expenses were not part of the settlement. That doesn’t mean they don’t exist obviously, only that I don’t see it unless the defendent has paid all past medical bills already such as a workers compensation case.
Maybe this is a state thing but I have never seen an insurance company that did NOT require the money back after a settlement nor a case where the money wasn’t taken out to directly reimburse the private carrier. For example, I get in an auto accident and my PIP benefits exhaust. In Florida, the health insurance then kicks in. I understand this is not true of all states. If there is a liability claim that settles successfully, funds for past medical bills are included in the settlement. The lawyer subtracts the money already paid by Blue Shield out of the settlement and reimburses them. That is routinely done much to the annoyance of the plaintiffs.
As a sidenote, I wonder who’s the idiot who keeps telling her about his death? If she can’t retain the info, it seems far kinder to just play along and let her think he’s alive (referring to how the article mentions that the poor woman keeps breaking down in tears every time someone reminds her he’s dead).
This clause, and clauses like it are very common. A situation I was in over thirty years ago when I was a shop steward was similar. It was pre-OSHA, and whatever you think of OSHA the industrial environment is much safer today because of it. A worker had lost a hand in an accident. At that time in New York State you couldn’t sue your employer, they had a lookup table for various body parts which told you how many weeks of pay that particular injury was worth. A hand might have been around 200 weeks pay. From this settlement money any disability pay you received before returning to work was always deducted, so if you had been out ten weeks healing enough to return you’d end up with a net of 190 weeks settlement.
In this guy’s case the unusual thing is that he had previously lost a finger (I said it was more dangerous back then, right?), and received some compensation for that, let’s say 20 weeks pay. This was deducted from the compensation for the hand as well, as the company had already paid for that body part.
State law has almost no effect on Wal-Mart’s benefit plans due to ERISA pre-emption.
Folks, if you have health insurance it very probably has a similar clause. This is a very common situation.
Each judgment is divided into separate parts – X amount for prior medical bills, Y amount for future meds, Z for pain and suffering, Q for loss of consortium and so forth.
If the health insurer (in this case Wal-Mart) paid X out of their pocket, why shouldn’t they be entitled to recover it from the party at fault? If the jury had felt the plaintiff were entitled to more damages for the other areas, they could have awarded them. Perhaps there was a reasons they didn’t. Or perhaps the plaintiff’s lawyer dropped the ball. In any case, Wal-Mart is doing the same thing every health insurer in the country does.
Think of the same situation in terms of property damage to your vehicle. You’re in a wreck caused by the other driver which totals your car. Your insurance company pays you the value of your destroyed car. Should you be able to recover again for your lost car from the at-fault driver? Nope. If there’s a recovery to be had it goes to your insurer.
Not that unusual, I don’t think. The lawyers get paid at the market rate, which in this case was probably a contingency (maybe 1/4 or 1/3 of the judgment or settlement). Add to that all the costs of trial preparation and you might approach 1/2 pretty easily.
But…but…but … Walmart is EVIL!!!11!! They are a corporation. Corporations are about evil greed, and stuff.
I see why Wal-Mart is entitled to the money. But if they were going to turn around and do this, why weren’t they a party to the lawsuit to begin with? If they had been co-plaintiffs, the jury could have understood that so much would be going to Wal-Mart and the rest would go toward her future bills, so they might have made a more appropriate award. Wal-Mart could have also brought its considerable legal department into the game.
Seems like a much better option than waiting for her to sue the trucking company and then taking her settlement, even if only from a PR standpoint.
I have no idea, but if it were the reporters, I’d want them strung up. (Yes, that bothered me, too, when I was reading the story.)
Bricker, can I ask you to cite any thread where I’ve claimed that corporations are evil as a matter of course? For the most part, I keep out of such threads, and usually my private feelings are that corporations do deserve equal protection to individuals. If only because if the balance tips too far in the other direction, the corporations will fail, often with devastating results for the individuals.
I’ll admit that I tend to believe that corporations can be amoral. Which, if you want, is a position I’d be willing to try to defend. (I can’t promise I will defend it, this is the Dope - I’ve had to eat personal prejudices before, after all.) What I said, and what I will stand by, is that this specific action by a specific corporation seems immoral to me, for all that it is legal.
Two and a Half Inches of Fun - there would be a simple way for Wal-Mart to get my support for this policy, in this case: If they were to take the settlement that the Shanks received, and then promise to extend their long-term disability coverage because of that, I’d have no complaints at all. Of course, part of the problem is that I tend to think that long-term disability care in the US is too often short-changed. Likewise, if there weren’t continuing medical bills from the original condition, I’d have less of a problem with the recompense to the insurance plan.
I have to admit that I do believe that there are differences of scale involved. No one can make me believe that $470,000 will bankrupt the Wal-Mart plan. Where unrecompensed payments of that magnitude could bankrupt the self-insuring small business owner.
For that matter, I also think that in some ways insurance companies and plans often try to play both sides of the street. On the one hand, they’re profit making ventures, calculating risks, and trying to figure how many premiums to take in to make sure that they’ll make a profit. And no matter the size of that profit, they never willingly talk about refunding premiums. (At least no premium refund I’ve ever heard about was initiated by the insurance companies, because they made too much money.) But if they get hit with a negative jackpot, there are often companies trying to welch on their promises, because suddenly it wouldn’t be profitable to pay everything out, all at once. And the risk that the insurance company chose to accept is suddenly not it’s fault, and something that must be compensated for, one way or another.
This isn’t to say that I don’t think that all claims for adjustments in the wake of drastic losses are without merit. But it does stink of ‘rules for thee and not for me’ no matter what.
I also want to state, explicitly, If this were a matter of a woman who had suffered a drastic injury, and recovered from it to the point of not needing extraordinary care, with associated extraordinary costs, I’d really have no problem with the fund collecting compensation.
I agree with you. I’m not sure based on the linked story whether the Shanks’ lawyer in the first suit simply dropped the ball, or if they had more reason to assume Wal-Mart wasn’t going to come after the settlement.
I’d assumed that included a hit from taxes, but the article doesn’t mention that. That does seem excessive - I thought that 33% was the standard percentage of an award to go to legal fees in such a case.
Doctor J, that sounds a very good question.