Let the following be a lesson to those who, like many of us, have employee health insurance through their employers.  If you seek compensation in a personal injury case, as is your right, you may have to reimburse the insurance company if they covered any of your medical bills after the personal injury, under a common process called "subrogation."

The point of subrogation is to avoid having medical bills paid for twice, once by the insurance company, and then by a defendant who is ordered to pay for medical bills as part of a verdict or settlement of a personal injury case.  However, in practice, it can seem like another way for a personal injury victim to be victimized, this time by their insurance company.

As the Wall Street Journal reports, 52-year-old Deborah Shank was involved in a semi tractor trailer accident seven years ago, which left her with permanent brain damage and confined to a wheelchair.  As part of a settlement with the trucking company, she and her husband received $700,000 to pay for her medical care.

At the time of the accident, Shank was an employee of Walmart, and received their healthcare coverage for medical expenses following the accident.  Whether she knew it or not, a subrogation clause was part of her Walmart health insurance, and after paying out $470,000 for medical coverage, the insurance company aimed to get back the money.

After legal fees and other expenses, the Shanks were left with $417,000, which they set up in a medical expenses fund.  However, Walmart sued them for the money, and though they appealed an initial verdict in Walmart’s favor, the Shanks eventually lost the case as well as the money.

What makes it particularly difficult for them is that the money left over from the settlement would not have been enough to pay her medical costs in the first place.  Thus, rather than fairly paying back money for medical expenses that Walmart covered, in their case it was closer to being taken for all they had by Walmart’s insurance plan.

Walmart, of course, was perfectly within its legal right, and pursued subrogation to restore funds back to its insurance coverage for the entire employee pool.  However, in this case, the fine print made the Shanks feel more betrayed than compensated when they won their personal injury case.