Disclaimer: This article is for informational purposes only and does not constitute legal advice.
Detailed Answer
Workers’ Compensation Subrogation in Pennsylvania
In Pennsylvania, when you receive workers’ compensation benefits after a workplace injury, your employer’s insurance carrier gains a subrogation right. Under Section 319 of the Workers’ Compensation Act (77 P.S. §671), the carrier may recover the total amount of benefits it paid if you later settle a third-party personal injury claim.
How the Lien Works
When you negotiate a personal injury settlement with a third-party insurer (for example, a negligent motorist or equipment manufacturer), the workers’ compensation carrier must be reimbursed. This creates a lien on your recovery, which typically includes:
- The full amount of wages and medical benefits paid.
- Reasonable costs of pursuing the third-party claim.
Calculating the Lien Amount
Pennsylvania law requires the lien to be reduced by the proportion of your attorney’s fees and litigation expenses. For instance, if you settle for $100,000 and incur 30% in attorney’s fees and costs, the lien attaches to the remaining $70,000. Your carrier must be reimbursed from that net amount.
Timing and Enforcement
The workers’ compensation carrier must assert its lien within 60 days after learning of your third-party recovery. If the carrier fails to act, it may lose its right to recover. Once asserted, the carrier can enforce the lien through a petition before the Workers’ Compensation Office of Adjudication.
Negotiating or Reducing the Lien
You may negotiate a reduction of the lien by presenting evidence of your non-economic damages (pain and suffering) and other costs not covered by workers’ compensation. In some cases, the carrier agrees to a pro-rata share of the total recovery, especially when your out-of-pocket expenses and attorney’s fees are substantial. Always document all expenses and discuss lien resolution strategies with counsel.
Helpful Hints
- Keep detailed records of all workers’ compensation benefits and medical bills.
- Track your attorney’s fees and litigation expenses closely—these reduce the lien base.
- Notify your workers’ compensation insurer promptly when you file a third-party claim.
- Consider negotiating a lien waiver or reduction during settlement talks.
- Consult a qualified personal injury attorney familiar with Pennsylvania workers’ compensation subrogation.