Subrogation is the right of legal substitution. Subrogation commonly arises when one party is required to indemnify (cover someone else for a loss) another or else face legal liability. There are typically three parties involved in subrogation: 1. “Subrogor” the party initially injured; “Subrogee” the party who compensates the subrogor for the injury and then succeeds to the rights of the subrogor; and the “Third Party”the person or entity that caused the injury to the Subrogor and who the Subrogee seeks to hold responsible for repayment.
Subrogation in Motor Vehicle Cases:
Determined by the Motor Vehicle Financial responsibility Law (MVFRL) 75 Pa.C.S.A. §1720. the MVFRL holds that in Pennsylvania, there is no right of subrogation or reimbursement.
Exceptions- The following entities may have a right of subrogation, despite MVFRL:
1. Federal Program- Medicare
2. State Prgram- Medicaid/DPW; employer’s self-funded ERISA plan; HMOs and plans governed by the 3. Federal Employees Benefits Act
4. Workers’ Compensation
5. Out-of-state health insurers
Pennsylvania employers have a right of subrogation in the context of workers’ compensation in the following scenarios:
1. Motor Vehicle Accidents
2. Products liability claims
3. Medical Malpractice Claims
4. General Negligence Claims
5. Legal Malpractice Claims
Employers are governed by 77 P.S. § 671 and, to establish a right of subrogation, requires proof that:
1. Employer was compelled to make comp payments as a result of a third party’s negligence; and
2. The fund from which it seeks subrogation was for the same compensable injury for which it paid/was liable under the Workers Comp Act.
I will discuss cases involving Medicare, Political Subdivisions, Medical Malpractice and much more in my next few posts.
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