Disclaimer: This article is for informational purposes and does not constitute legal advice.
Detailed Answer
When you file a third-party personal injury claim while receiving Rhode Island workers’ compensation benefits, state law grants your employer’s insurer a right to reimbursement. Under R.I. Gen. Laws § 28-33-18, the insurer may recoup benefits paid from the proceeds of any recovery you obtain against a negligent third party. To coordinate benefits and protect your net recovery, follow these key steps:
1. Understand Subrogation Rights
R.I. Gen. Laws § 28-33-18 outlines the insurer’s lien on third-party recoveries and its entitlement to reimbursement. The insurer steps into your shoes to recover paid benefits and holds a claim against the at-fault party. It can require you to set aside sufficient funds from any settlement or judgment.
Learn more: R.I. Gen. Laws § 28-33-18
2. Provide Timely Notice
Although Rhode Island law does not specify a strict deadline, sending written notice to the workers’ compensation insurer when you file your third-party lawsuit is best practice. Early notice avoids disputes over the insurer’s lien and ensures transparency.
3. Calculate the Reimbursement Amount
R.I. Gen. Laws § 28-33-18.1 limits the fees that the insurer may owe to your attorney for handling the subrogation claim. To calculate the amount you owe the insurer, tally:
- Total benefits paid by the insurer;
- Your total recovery from the third party;
- Reasonable attorney fees and litigation costs.
Subtract the attorney fees and costs from your gross recovery to determine the net amount due to the insurer.
Learn more: R.I. Gen. Laws § 28-33-18.1
4. Draft Clear Settlement and Release Language
When you negotiate with the third party or its insurer, include provisions that address the workers’ compensation lien. Specify who will hold reimbursed funds in trust or escrow until the insurer asserts its claim. Clear language prevents later challenges and protects both your interests and the insurer’s rights.
5. Seek Court Approval if Required
If you cannot agree with the workers’ compensation insurer on the reimbursement amount, you may petition a Rhode Island court for guidance. The court can allocate the recovery between you, your attorney, and the insurer to ensure fairness.
Helpful Hints
- Keep a running total of all workers’ compensation benefits paid.
- Send written notice to the insurer immediately after filing your third-party claim.
- Hire a personal injury attorney experienced in workers’ compensation subrogation.
- Hold settlement funds in an interest-bearing escrow account until the lien resolves.
- Document all attorney fees and costs to allocate expenses accurately.