In one of my favorite Seinfeld episodes[1], a frightened Kramer is lost and calls Jerry from a phone booth somewhere in Manhattan. Jerry asks him to look around for a street sign and Kramer responds with a touch of panic that he is at the intersection of 1st Street and 1st Avenue, concluding that he must be at the “nexus of the universe.” It was a funny moment which I’ve anecdotally used to describe bizarre situations in life where common sense seems to have all but vanished. The situation in Florida involving the intersection between PIP and workers’ compensation is a perfect example.
When a Florida employee is injured in a motor vehicle accident while in the course of his employment, he may be entitled to medical and lost wage benefits from workers’ compensation and no-fault PIP insurance simultaneously. The Florida Motor Vehicle No-Fault Law requires motorists to maintain a minimum of $10,000 in insurance for PIP benefits to cover loss sustained as a result of bodily injury, sickness, or death related to motor vehicles.[2] PIP covers 80% of medical and related expenses[3] and 60% of wage loss.[4] F.S.A. § 627.736(4) provides that PIP benefits are considered “primary.” Although PIP benefits are primary, workers’ compensation benefits “shall be credited against” PIP benefits.[5] At the same time, any non-construction industry employer with four or more employees, full-time or part-time, is required to carry workers’ compensation coverage to cover its employees while in the course and scope of their employment, including when they are driving a vehicle.
When benefits are received in the period shortly after the automobile accident, the PIP statute contemplates credit for the workers’ compensation benefits already received by the employee.[6] However, when the liability claim is settled, the plaintiff is obligated to reimburse the workers’ compensation carrier. At that point, the plaintiff is entitled to receive additional benefits from the PIP carrier because the credit for workers’ compensation no longer exists.[7] There are two possible scenarios in which a PIP carrier might be looking for reimbursement.
Employee Receives Both PIP and Workers’ Compensation. When the employee opts for PIP benefits and a PIP carrier has made payments to a driver who also received workers’ compensation benefits for the same injury, the driver can keep the PIP benefits to the extent his loss exceeds the workers’ compensation payments, up to the PIP limits.[8] However, when the third-party claim is settled, the plaintiff is obligated to reimburse the workers’ compensation carrier its workers’ compensation lien. At that point, the plaintiff is entitled to receive additional benefits from the PIP carrier because the credit for workers’ compensation no longer exists.[9] Where the workers’ compensation lien is waived, then no additional PIP benefits are due.[10]
Employee Receives Only PIP Benefits. On occasion, the employee files only for PIP benefits and the PIP carrier looks to the workers’ compensation claim for reimbursement. F.S.A. § 627.736(4) effectively makes both PIP and workers’ compensation primary coverage for a work-related automobile accident. While it says PIP is primary, it allows credit for workers’ compensation benefits paid. It is unusual for two insurance companies to provide primary coverage without a system to determine permanently their respective priorities through “other insurance” clauses or similar procedures, but that is the situation in Florida. Sadly, we are dealing with the nexus of the universe here and there is no direct system for PIP carriers to seek reimbursement from a workers’ compensation carrier. However, reimbursement may be possible in a roundabout way. F.S.A. § 440.13(13) provides in part as follows:
A health care provider may not collect or receive a fee from an injured employee within this state, except as otherwise provided by this chapter. Such providers have recourse against the employer or carrier for payment for services rendered in accordance with this chapter.[11]
A “health care provider” would include a PIP carrier. The PIP carrier can seek reimbursement directly from the workers’ compensation claim, although there currently is no clean system for accomplishing this. However, a workers’ compensation carrier will rarely be able to seek reimbursement from a PIP carrier because it pays a higher percentage of medical expenses and wage losses, and because F.S.A. § 627.736(4) provides for an offset of PIP benefits in the amount of workers’ compensation benefits paid.
Complicating the issue even further is the situation where the insured completes an Assignment of Benefits (AOB) to the health care provider. If a policy or plan allows for an AOB, the insured fills out a form giving permission that any allowable benefit payment is to be sent to the medical provider who provided the health care. If reimbursement were issued to the insured directly, the insured would then have to be billed by the provider’s office for payment. The AOB process, therefore, cuts out the extra step. Not all insurers allow for an AOB, and if a medical provider secures a patient’s permission to receive payment, the insurance company is not bound to honor the agreement. However, in Florida and Louisiana, state laws order an insurer to accept an AOB, even if it is against their company policy. It isn’t hard to see how the AOB process exponentially complicates the nexus between PIP and workers’ compensation benefits.
The Florida Legislature might do well to reconsider the advisability of making both PIP and workers’ compensation primary coverage in these cases, and to prescribe a procedure for dealing with the interface between the two sources of benefits and the inexorable rights of reimbursement that will follow. Although the primary responsibility for claims handling may rest logically with the workers’ compensation carrier, it would be simpler if the primary responsibility for the payment of benefits rested with the PIP carrier to the extent of that coverage. That method would eliminate the need for subsequent reimbursement.
If you should have any questions regarding this article or subrogation in general, please contact Gary Wickert at gwickert@mwl-law.com.
[1] “The Maid” was the 175th episode of the sitcom and aired on April 30, 1998.
[2] F.S.A. § 627.736(1).
[3] F.S.A. § 627.736(5)(a) reflects a 2008 change to Florida’s PIP automobile law that created a new reimbursement formula. Under the formula, most healthcare providers, with the exception of specialists such as surgeons, are paid based on a rate of 80% of 200% of the Medicare rate.
[4] F.S.A § 627.736(1).
[5] F.S.A § 627.736(4).
[6] Fortune Ins. Co. v. McGhee, 571 So.2d 546 (Fla. App. 1990).
[7] Id.
[8] Greer v. State Automobile Ins. Co., 530 So.2d 509 (Fla. App. 1988).
[9] McGhee, supra.
[10] Cannino v. Progressive Express Ins. Co., 58 So.3d 275 (Fla. App. 2010).
[11] F.S.A. § 440.13(13).
