Understanding Subrogation in Pennsylvania
Insurance Companies May Seek Repayment in Third-Party Cases
Most Pennsylvania workers are covered by the state Workers’ Compensation Act, which provides employees with workers’ compensation benefits when they are injured at work or develop a work-related illness.
No-Fault System
The workers’ compensation system is no-fault, meaning that workers are generally entitled to compensation regardless of who was at fault for their accident. Therefore, employees may receive payment from their employer’s workers’ compensation insurance carrier without having to prove that their employer’s negligence caused their accident. In exchange, employees are prohibited from filing personal injury lawsuits against their employers.
Third-Party Claims
However, if someone other than the employer negligently or intentionally caused an employee’s injuries or illness, the employee may file a third-party injury claim against that individual or entity.
Unlike workers’ compensation claims, third-party claims allow injured workers to collect additional forms of compensation, such as pain and suffering, loss of consortium, and emotional distress.
Examples of third parties include:
- Drivers responsible for causing a motor vehicle accident
- Government entities
- Manufacturers of dangerous or defective parts
- Property owners
- Subcontractors
Workers’ Compensation Subrogation
If an injured worker prevails in their third-party case, the employer’s workers’ compensation carrier may collect repayment for the benefits it paid out in a process called subrogation. Damages awarded to the injured employee by the workers’ compensation insurer can be partly recuperated.
There is no time limit for subrogation, therefore workers’ compensation insurance companies may attempt to recover the benefits they paid years after a claim is filed.
Because injured workers may file for compensation in both workers’ compensation and third-party claims, there is the potential for double recovery. To prevent this, workers’ compensation insurers have an absolute right to subrogation.
Immunity From Subrogation
Recently, the Pennsylvania Supreme Court ruled that medical expenses are not considered installments of compensation; therefore, workers’ compensation insurance carriers may not subrogate future medical expenses. Excess recoveries may only be used as a credit against future wage loss or disability payments, not future medical payments.
The Pennsylvania Supreme Court also granted public employers immunity from subrogation claims. As such, if your third-party suit is against a government entity such as the Southeastern Pennsylvania Transportation Authority (SEPTA) or the Pennsylvania Department of Transportation (PennDOT), you are entitled to keep the full amount of your recovery through settlement or trial.
Philadelphia Workers’ Compensation Lawyers at Larry Pitt & Associates, P.C. Help Injured Workers Collect Maximum Compensation for Their Injuries
If you were injured by someone other than your employer, you may be able to file both a workers’ compensation claim and a third-party lawsuit. An experienced Philadelphia workers’ compensation lawyer at Larry Pitt & Associates, P.C. can help you navigate the legal system and collect the maximum benefits to which you are entitled. Call us at 888-PITT-LAW or complete our online contact form to discuss your case.
We proudly represent injured workers in Berks County, Bucks County, Chester County, Delaware County, Montgomery County, Philadelphia County and throughout Pennsylvania, including those in the communities of Abington, Ambler, Ardmore, Bala Cynwyd, Bensalem, Clifton Heights, Crum Lynne, Darby, Downingtown, Doylestown, Drexel Hill, Essington, Folcroft, Glenolden, Haverford, Havertown, Holmes, Kutztown, Lansdowne, Media, Merion Station, Morton, Narberth, Norristown, Norwood, Philadelphia, Prospect Park, Quakertown, Reading, Roxborough, Sharon Hill, Upper Darby, West Chester and Wynnewood.
