Ohio Anti-Subrogation Law Passed As Part of Budget Approved by Governor Kasich

Ted Traut

Ted Traut

The following is a repost of an article written by Attorney Ted Traut of Weltman, Weinberg & Reis Co., L.P.A. We thank Ted and his firm for their willingness to share this information with our readers. Although the immediate impact of this legislation will be limited to medical subrogation claims within the state of Ohio, it may influence similar decisions in other states. The firm of Weltman Weinberg & Reis is a member of The National List. We strive to give our members additional marketing opportunities, whenever possible. If a member of your firm would like to write a Guest Blog or repost an article on The NL Insider, please contact us at info@nationallist.com 

Governor Kasich approved an amendment as part of the state budget which will affect an insurer or health plan’s ability to recover medical expenses that it has paid out on behalf of its insured as a result of an injury.  This amendment was introduced just days before the budget was set to be approved and was approved without an opportunity for public debate.  (A copy of the proposed statute including the items which were vetoed via line item is attached below.)

While the Governor did exercise his line item veto to strike some language out of the amendment[1], the statute adopts the “Made Whole” rule in Ohio overruling a long history of case law where Courts refused to re-write insurance policies. In his veto message, the Governor states:

This item contains significant changes to the long-established procedures for distributing recoveries in tort actions involving subrogation. Subrogation is a complex issue that affects multiple stakeholders in numerous ways. These changes could very well be merited and that can be best determined after a thorough public debate. While respecting the intent of the General Assembly, the impact of this item should be minimized until that public debate can occur. Therefore, this veto is in the public interest.

Despite the sentiments expressed in the veto message, this major change to the law is set to go into effect as O.R.C. Section 2323.44 on September 28, 2015.

The statute provides that an insurer’s claim will be diminished in the same proportion that the injured party’s claim is diminished if the injured party is unable to collect full value “resulting from limited liability insurance or any other cause.”  In the case of a dispute over the full value of a claim, either party can file a declaratory judgment action.  It is anticipated that this change could lead to increased litigation as agreeing to the value of a claim can be very difficult, particularly where noneconomic damages are involved.

Weltman Weinberg & ReisWeltman, Weinberg and Reis will continue to monitor this situation as the statute is set to take effect and will work in conjunction with the National Association of Subrogation Professionals (NASP) to make sure that the industry is heard. If you have any questions concerning the law please contact Ted Traut at 216-739-5002 or ttraut@weltman.com.


[1] Most notably, the Governor used the line item veto to strike out the adoption of the “Common Fund” rule which would have required insurers to foot the bill for a portion of the fees, expenses, and court costs incurred by the injured party and his attorney.

Attachment: Ohio Anti Subrogation law

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