Claims by the Employer or the Insurance Company Against Third Parties in Louisiana Workers Compensation

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The Rights of the Employer and Its Workers Compensation Insurance Company Against Third Parties in Louisiana Workers Compensation

Under Louisiana law, the employee is entitled to proceed both by claiming workers compensation benefits from the employer and its workers compensation insurance company, while at the same time filing a claim or lawsuit for damages against a third-party wrongdoer.

However, the employee will not be able to recover for the same damages twice - otherwise known as "double recovery" - because the employer and its workers compensation insurance company are entitled to "intervene" in the employee's third-party lawsuit and require that the judgment be in favor of the employer to the extent required to reimburse or indemnify the employer and its workers compensation insurance company.

In other words, the employer and its workers compensation insurance company will be reimbursed for what they have to pay in workers compensation benefits, and only the excess amount will go to the employee.

In some cases, the “recovery” of the employer and its workers compensation insurance company takes the form of a credit against future workers compensation benefits owed, which then permits the suspension of those future payments.

Also, the employer or its workers compensation insurance company may institute its own lawsuit against the third-party wrongdoer (otherwise known as the tortfeasor), in which case the employee is allowed to intervene in order to ensure that the employee receives the maximum amount of money that the employee may be entitled.

So, Louisiana law gives the employer and its workers compensation insurance company two methods of proceeding to enforce its substantive rights:

    1. The employer and its workers compensation insurance company can bring a separate suit against the third person, without regard to whether the employee has brought suit, or is planning to do so; and 
    2. The employer and its workers compensation insurance company can assert its rights using an incidental demand - typically known as an intervention - in the employee's suit against the same third person.

However, even though Louisiana law gives the employer and its workers compensation insurance company the right to proceed against a third person for reimbursement of the amount of compensation “actually paid” to an injured employee, the employer or its workers compensation insurance company may validly waive its right of reimbursement if it chooses to do so, and this waiver is often called a “waiver of subrogation.”

Items Recoverable by the Employer and Its Workers Compensation Insurance Company from Third Parties in Louisiana Workers Compensation

Louisiana law provides the employer or its workers compensation insurance with “first dollar” rights to and a lien upon tort recovery.

In other words, whether the employer or its workers compensation insurance originally files or intervenes in the employee's suit, the employer or its workers compensation insurance is to be paid its recoverable lien by preference and priority from the proceeds of tort recovery, without regard to whether the damages awarded are classed as pain and suffering, medicals, lost wages, or something else.

Only after the intervenor has recovered what it is due is any excess apportioned to the plaintiff.

The most common items which the employer or its workers compensation insurance company typically recovery are:

    1. Weekly lost wage (indemnity) benefits paid to the employee; and
    2. Medical expenses paid on behalf of the employee.

However, if a judgment is rendered in favor of the employer or its workers compensation insurance company, it is entitled to legal interest from the date of judicial demand, which is typically the date of the filing of the intervention or suit by the payor on all benefits paid before filing the intervention or suit.

But if the employer or its workers compensation insurance company should mistakenly pay workers compensation benefits to an employee who was not entitled to such benefits, then it cannot claim reimbursement from the third person for those benefits.

And, if the employer or its workers compensation insurance company has chosen to pay the injured employee full wages during the period of his disability, reimbursement is limited to the amount the employer or its workers compensation insurance company was legally required to pay.

In addition to reimbursement for the amounts actually paid to the employee or on his behalf up to the date of trial, the employer and its workers compensation insurance company are often entitled to a credit against the tort recovery for amounts for future workers compensation payments or medical expenses to be undertaken.

In other words, the employer and its workers compensation insurance company are entitled to reimbursement for not only those amounts already paid, but those amounts it will become obligated to pay in the future.

Additionally, if the plaintiff's recovery is reduced in percentage by application of comparative negligence or comparative fault, then the intervenor is to recover on its lien in the same percentage.

So, for example, if the plaintiff employee is awarded 80% of his damages because of the plaintiff's 20% comparative negligence, then the workers compensation insurance company would only recover 80% of its lien.

Time Limits (or Prescription) for Filing a Third-Party Lawsuit

Typically, a third party claim - such as a personal injury lawsuit - must be filed within one year of the date of the accident, or the rights of the injured party will expire (or prescribe).

However, if an injured employee files a third party claim - such as a personal injury lawsuit - within the one-year time limits, then this lawsuit by the employee interrupts prescription (or in other words, cancels the time limit) as to the employer and its workers compensation insurance company.

In that case, the employer and its workers compensation insurance company is permitted to intervene more than a year after the date of the accident.

But in the absence of the employee's suit, the employer and its workers compensation insurance company must act within a year of the accident to preserve its rights.

Likewise, if an injured employer or its workers compensation insurance company file a third party claim - such as a personal injury lawsuit - within the one year time limits, then this lawsuit by the employer or its workers compensation insurance company interrupts prescription (or in other words, cancels the time limit) as to the employee, and thus the employee is permitted to intervene in the lawsuit more than a year after the date of the accident.

But a suit by the employee for his own personal injuries does not interrupt prescription running against a property damage claim by the employer arising out of the same incident.

Notification by the Employee to the Employer or its Workers Compensation Insurance Company

An injured employee is not required to intervene in the employer or its insurer's pending action third-party claim; such action is permissive, not mandatory.

But Louisiana workers compensation law requires that when the employee files a proceeding against a third person, it shall notify the employer or its workers compensation insurance company of the action.

And in reverse, Louisiana workers compensation law requires that when the employer or its workers compensation insurance company file a proceeding against a third person, it shall notify the employee of the action.

Importantly, the failure of the other party to intervene in a proceeding against a third person prevents that party from receiving any of the proceeds of that litigation.

But receipt of notice is not a condition required to institute suit against the third person.

The third-party defendant does not need to pay the employee in full for damages and also reimburse the workers compensation insurance company in full for compensation paid.

Instead, once the defendant has paid the full damage amount under the lawsuit, the workers compensation insurance company cannot go after the defendant for additional amounts, even if the workers compensation insurance company was never notified and therefore was denied the right to participate in the original proceeding.

Also, if the employee files a lawsuit against a third person, and notifies the employer or the workers compensation insurance company of this lawsuit, the employer and the workers compensation insurance company lose the right to bring a separate cause of action lawsuit, and their only remedy is to file an intervention in the pending litigation lawsuit. 

Unapproved Settlements in Third-Party Claims in Louisiana Workers Compensation

Louisiana law requires that an employee notify the employer or its workers compensation insurance company if the employee files a lawsuit against a third party in order to recover damages related to the employee's workplace injury. 

Louisiana law requires that the employer or its workers compensation insurance company notify the employee in writing if the employer or its workers compensation insurance company files a lawsuit against a third party in order to recover damages related to the employee's workplace injury. 

Remedies Against the Employee for Failure to Approve a Third-Party Settlement

If the employee settles his or her third-party lawsuit without the written approval from the employer or its workers compensation insurance company at the time of or before the settlement, then the employee forfeits his or her right to future workers compensation benefits, including even medical benefits. 

However, the employee may "buy back" the right to workers compensation benefits by paying to the employer or its workers compensation insurance company the lesser of: 

    1. The total amount of workers compensation benefits, including medical benefits, previously paid to or on behalf of the employee, exclusive of attorney fees arising out of the compromise; or
    2. Fifty percent of the total amount that has been recovered in the settlement.

But if the employee buys back the right to workers compensation benefits, the employer or its workers compensation insurance company still receives a dollar for dollar credit against the full amount paid in compromise, minus attorney fees and costs paid by the employee in prosecution of the third party claim, and this credit is not reduced by the amount that the employee paid to buy back the right to the workers compensation benefits.

Remedies Against a Third-Party for Failure to Approve a Settlement with the Employee

The rights of the employer and its workers compensation insurance company against a third party that settles a lawsuit with the employee without approval depends on:

    1. The timing of the settlement;
    2. The timing of any invention by the employer or its workers compensation insurance company; and
    3. The third party's notice of the claim of the employer or its workers compensation insurance company.

When a lawsuit has been filed against a third party, and the employer and its workers compensation insurance company have intervened, the third party must have the consent of the employer and its workers compensation insurance company in writing to settle the claim. 

If - after the intervention of the employer and its workers compensation insurance company - the third party settles the claim without written approval of the employer and its workers compensation insurance company, the third party is liable to the employer or insurer for the full amount of the lien of the employer and its workers compensation insurance company, without needing to prove that the third party was responsible for the employee's injury.

If - after the third party has adequate notice of the claim of the employer and its workers compensation insurance company, but before the intervention of the employer and its workers compensation insurance company - the third party settles with the employee without the approval of the employer and its workers compensation insurance company, the employer and its workers compensation insurance company can still seek reimbursement from the third party, but (unlike the situation where the employer or its insurance company has already intervened) the employer and its workers compensation insurance company must still prove that the third party is responsible for the employee's injury.

Finally, if a third party does not have adequate notice of the claim of the employer or its workers compensation insurance company, and the third party settles with the injured employee, neither the employer nor its workers compensation insurance company is entitled to reimbursement from the third party.   

Attorney's Fees in Third-Party Lawsuits in Louisiana Workers Compensation

Under Louisiana workers compensation law, the workers compensation insurance company will have to share the burden of the employee's legal fees when the employee's attorney performs most or all of the services that achieved or improved the joint recovery of the employee and the workers compensation insurance company in the third-party tort action.

If both the injured worker and the workers compensation insurance company have been harmed by the conduct of a third-party wrongdoer (or tortfeasor), then they both own together the right to be reimbursed by that tortfeasor, though each is required to contribute in proportion to his or her interest to the expenses of legal services that work to his or her benefit.

Thus, the workers compensation insurance company would have to compare the amount of its reimbursement to the total amount of the tort recovery and then be required to pay that percentage of the attorney's fees. 

So if the workers compensation insurance company (calculating its reimbursement without reference to the attorney's fees) received about 60% of the awarded amount, and the plaintiff the remaining 40%, then the “cost of the recovery” should be split between them in that percentage.

However, Louisiana courts are not bound by the agreement between client and attorney that a specified fraction of the recovery is paid as a fee.

Instead, rather than contractual resolution between the parties, a Louisiana Judge will determine the split of the fee of the employee's attorney and the workers compensation insurance company's attorney.

Specifically, an attorney's fee must reflect actual services which helped achieve a recovery, rather than the duplicative services or those designed to benefit a single party such as the mere monitoring of proceedings.

In other words, how much did each attorney actually contribute to achieving the recovery?

The attorney for the workers compensation insurance company cannot expect the employee's attorney to do all the work, but then demand a share of the recovery as an attorney's fee. 

The Moody Formula for Determining Attorney's Fees in Third-Party Lawsuits

The formula for calculation of the appropriate fee allocation is known as the "Moody" formula, because of the famous legal case wherein the formula was designed.

The Moody formula applied to all sums “recovered” by the intervenor, even as a future credit against compensation owed, provided that

    1. The employer is not liable for a share of the attorney's fees attributable to any future credit;
    2. The employee is not liable for a share of the employer's attorney's fees for any “post-judgment damages”; and
    3. The “reasonable legal fee” for any recovery cannot exceed one-third of the intervenor's recovery for prejudgment payments or damages.

The Moody formula requires a calculation of the intervenor's proportion of a reasonable fee for the collection of that sum (as to which a contingency fee arrangement is not binding if not reasonable), and then an application of the percentage interest of the intervenor to both that fee and any cost of litigation.

So, if the employee brings a tort action and recovers $300,000.00 and the costs of the litigation are $20,000.00, and if the employer or carrier has intervened to recover $90,000.00 in benefits paid, and if the court determines that the agreed contingency fee of one third is reasonable, the calculation would be as follows:

(1)  Total recovery = $300,000 

(2)  Total of intervention = $90,000 

(3)  The proportionate share of total recovery realized by intervenor = 30% 

(4)  Reasonable attorney's fee = $100,000 

(5)  Intervenor's share of attorney's fee = $30,000 

(6)  Intervenor's share of costs = $6,000

As a result, the intervenor's net recovery from the $300,000 award to the employee as a tort plaintiff is $54,000—the $90,000 in benefits paid less the intervenor's $36,000 share of the attorney's fees and costs.

The costs of $20,000 are paid or reimbursed as appropriate, and the plaintiff's attorney is paid $100,000, leaving the plaintiff's net recovery from the tort action as $126,000 (to accompany the $90,000 in workers compensation benefits that the employee has already received).

These sums do not include interest, which is calculated on each sum due from the date of judicial demand.

Additionally, if the intervenor cannot establish that its efforts augmented the recovery, then any credit for its attorney's fees will be denied.

However, if the intervenor can prove that its own attorney helped achieve the recovery, then the reasonable sum is an offset against the amount otherwise deductible from the intervenor's recovery.

So in the prior example, if $10,000 is a reasonable fee for the intervenor's attorney, then the $30,000 share of the fee would be reduced to $20,000 and the intervenor's net recovery would be $64,000, and the employee's net recovery becomes $116,000 because he has “paid” for that attorney as well.

The Louisiana Statutes for Third-Party Claims in Louisiana Workers Compensation

The primary Louisiana statutes regarding third-party claim in workers compensation are La. R.S. 23:1101, La. R.S. 23:1102, La. R.S. 23:1103, La. R.S. 23:1104, La. R.S. 23:1032,  and La. R.S. 23:1205, which read as follows:

§1101.  Employee and employer suits against third persons; effect on right to compensation

A.  When an injury or compensable sickness or disease for which compensation is payable under this Chapter has occurred under circumstances creating in some person (in this Section referred to as "third person") other than those persons against whom the said employee's rights and remedies are limited in R.S. 23:1032, a legal liability to pay damages in respect thereto, the aforesaid employee or his dependents may claim compensation under this Chapter and the payment or award of compensation hereunder shall not affect the claim or right of action of the said employee or his dependents, relations, or personal representatives against such third person, nor be regarded as establishing a measure of damages for the claim; and such employee or his dependents, relations, or personal representatives may obtain damages from or proceed at law against such third person to recover damages for the injury, or compensable sickness or disease.

B.  Any person having paid or having become obligated to pay compensation under the provisions of this Chapter may bring suit in district court against such third person to recover any amount which he has paid or becomes obligated to pay as compensation to such employee or his dependents.  The recovery allowed herein shall be identical in percentage to the recovery of the employee or his dependents against the third person, and where the recovery of the employee is decreased as a result of comparative negligence, the recovery of the person who has paid compensation or has become obligated to pay compensation shall be reduced by the same percentage.  The amount of any credit due the employer may be set in the judgment of the district court if agreed to by the parties; otherwise, it will be determined pursuant to the provisions of R.S. 23:1102(A).

C.  For purposes of this Section, "third person" shall include any party who causes injury to an employee at the time of his employment or at any time thereafter provided the employer is obligated to pay benefits under this Chapter because the injury by the third party has aggravated the employment related injury.

D.  Repealed by Acts 2005, No. 267, §2.

Acts 1976, No. 147, §2; Acts 1985, No. 931, §1; Acts 1989, No. 454, §4, eff. Jan. 1, 1990; Acts 1990, No. 973, §1; Acts 1997, No. 1354, §1, eff. July 15, 1997; Acts 2005, No. 257, §§1, 2.

§1102.  Employee or employer suits against third persons causing injury; notice of filing

A.(1)  If either the employee or his dependent or the employer or insurer brings suit against a third person as provided in R.S. 23:1101, he shall forthwith notify the other in writing of such fact and of the name of the court in which the suit is filed, and such other may intervene as party plaintiff in the suit.

(2)  Any dispute between the employer and the employee regarding the calculation of the employer's credit may be filed with the office of workers' compensation and tried before a workers' compensation judge.  However, any determination of the employer's credit shall not affect any rights granted to the employer or the employee pursuant to R.S. 23:1103(C).

B.  If a compromise with such third person is made by the employee or his dependents, the employer or insurer shall be liable to the employee or his dependents for any benefits under this Chapter which are in excess of the full amount paid by such third person, only after the employer or the insurer receives a dollar for dollar credit against the full amount paid in compromise, less attorney fees and costs paid by the employee in prosecution of the third party claim and only if written approval of such compromise is obtained from the employer or insurer by the employee or his dependent, at the time of or prior to such compromise.  Written approval of the compromise must be obtained from the employer if the employer is self-insured, either in whole or in part.  If the employee or his dependent fails to notify the employer or insurer of the suit against the third person or fails to obtain written approval of the compromise from the employer and insurer at the time of or prior to such compromise, the employee or his dependent shall forfeit the right to future compensation, including medical expenses.  Notwithstanding the failure of the employer to approve such compromise, the employee's or dependent's right to future compensation in excess of the amount recovered from the compromise shall be reserved upon payment to the employer or insurer of the total amount of compensation benefits, and medical benefits, previously paid to or on behalf of the employee, exclusive of attorney fees arising out of the compromise; except in no event shall the amount paid to the employer or insurer exceed fifty percent of the total amount recovered from the compromise.  Such reservation shall only apply after the employer or insurer receives a dollar for dollar credit against the full amount paid in compromise, less attorney fees and costs paid by the employee in prosecution of the third party claim.

C.(1)  When a suit has been filed against a third party defendant in which the employer or his insurer has intervened, if the third party defendant or his insurer fails to obtain written approval of the compromise from the employer or his insurer at the time of or prior to such compromise and the employee fails to pay to the employer or his insurer the total amount of compensation benefits and medical benefits out of the funds received as a result of the compromise, the third party defendant or his insurer shall be required to reimburse the employer or his insurer to the extent of the total amount of compensation benefits and medical benefits previously paid to or on behalf of the employee to the extent said amounts have not been previously paid to the employer or his insurer by the employee pursuant to the provisions of Subsection B of this Section.  Notwithstanding such payment, all rights of the employer or his insurer to assert the defense provided herein against the employee's claim for future compensation or medical benefits shall be reserved.

(2)  Nothing herein shall be interpreted to affect the rights of the employer or his insurer to otherwise seek reimbursement for past or future compensation benefits and medical benefits against a third party defendant or his insurer without regard to the actions of the employee on whose behalf said compensation and medical benefits were paid.

(3)  Repealed by Acts 1989, No. 454, §10, eff. Jan. 1, 1990.

Amended by Acts 1983, 1st Ex. Sess., No. 1, §1, eff. July 1, 1983.  Acts 1984, No. 852, §1; Acts 1985, No. 926, §1, eff. Jan. 1, 1986; Acts 1989, No. 454, §§4, 10, eff. Jan. 1, 1990; Acts 1997, No. 1354, §1, eff. July 15, 1997; Acts 2005, No. 257, §1.

§1103. Damages; apportionment of between employer and employee in suits against third persons; compromise of claims; credit

A.(1) In the event that the employer or the employee or his dependent becomes party plaintiff in a suit against a third person, as provided in R.S. 23:1102, and damages are recovered, such damages shall be so apportioned in the judgment that the claim of the employer for the compensation actually paid shall take precedence over that of the injured employee or his dependent; and if the damages are not sufficient or are sufficient only to reimburse the employer for the compensation which he has actually paid, such damages shall be assessed solely in his favor; but if the damages are more than sufficient to so reimburse the employer, the excess shall be assessed in favor of the injured employee or his dependent, and upon payment thereof to the employee or his dependent, the liability of the employer for compensation shall cease for such part of the compensation due, computed at six percent per annum, and shall be satisfied by such payment. The employer's credit against its future compensation obligation shall be reduced by the amount of attorney fees and court costs paid by the employee in the third party suit.

(2) No compromise with such third person by either the employer or the injured employee or his dependent shall be binding upon or affect the rights of the others unless assented to by him.

(3) Any dispute between the employer and the employee regarding the calculation of the employer's credit may be filed with the office of workers' compensation and tried before a workers' compensation judge. If a third party action has been filed in a district court, such dispute shall be filed in the district court and tried before a district judge unless the parties agree otherwise. However, any determination of the employer's credit shall not affect any rights granted to the employer or the employee pursuant to R.S. 23:1103(C).

B. The claim of the employer shall be satisfied in the manner described above from the first dollar of the judgment without regard to how the damages have been itemized or classified by the judge or jury. Such first dollar satisfaction shall be paid from the entire judgment, regardless of whether the judgment includes compensation for losses other than medical expenses and lost wages.

C.(1) If either the employer or employee intervenes in the third party suit filed by the other, the intervenor shall only be responsible for a share of the reasonable legal fees and costs incurred by the attorney retained by the plaintiff, which portion shall not exceed one-third of the intervenor's recovery for prejudgment payments or prejudgment damages. The amount of the portion of attorney fees shall be determined by the district court based on the proportionate services of the attorneys which benefitted or augmented the recovery from the third party. The employee as intervenor shall not be responsible for the employer's attorney fees attributable to postjudgment damages nor will the employer as intervenor be responsible for the attorney fees attributable to the credit given to the employer under Subsection A of this Section. Costs shall include taxable court costs as well as the fees of experts retained by the plaintiff. The pro rata share of the intervenor's costs shall be based on intervenor's recovery of prejudgment payments or prejudgment damages.

(2) When recovery of damages from a third party is made without filing of a suit, the employer shall be responsible for an amount, not to exceed one-third of his recovery on pre-compromise payments, for reasonable legal fees and costs incurred by the attorney retained by the employee or his dependent in pursuit of the third party matter. The responsibility for payment of this amount shall exist only if there is written approval of the compromise by the employer, his compensation carrier, or the compensation payor.

D. An insurer shall grant its insured a dollar-for-dollar credit for any amount on any claim paid pursuant to this Chapter on the employer's behalf and recovered in the current year, less any reasonable expenses incurred in the recovery by the insurer, in an action or compromise pursuant to this Section and R.S. 23:1102. The credit shall be used by the insurer in the calculation of the loss experience modifier promulgated by and in accordance with the rules of the National Council on Compensation Insurance, to be applied in determining the annual premium paid by the employer for workers' compensation insurance under this Chapter. The group self-insurance fund shall apply the loss experience modifier authorized by R.S. 23:1196.

Amended by Acts 1958, No. 109, §1; Acts 1989, No. 454, §4, eff. Jan. 1, 1990; Acts 1997, No. 53, §1; Acts 1997, No. 59, §1; Acts 1997, No. 1354, §1, eff. July 15, 1997; Acts 2016, No. 470, §1.

§1104.  Quantification of employer fault

In a suit brought pursuant to R.S. 23:1101, the fault of persons immune from suit in tort under R.S. 23:1032 shall be assessed as a percentage of the aggregate fault of all persons causing or contributing to the employee's injury, and the fault so assessed shall not be reallocated to any other person or party.  The recovery had in such a suit by the employer or any other person having paid or having become obligated to pay compensation shall be reduced by the fault so assessed.  This reduction is in addition to but not duplicative of any reduction made pursuant to Civil Code Articles 2323, 2324, and 2324.2 and R.S. 23:1101(B).

Acts 1996, 1st Ex. Sess., No. 15, §1.

§1032.  Exclusiveness of rights and remedies; employer's liability to prosecution under other laws

A.(1)(a)  Except for intentional acts provided for in Subsection B, the rights and remedies herein granted to an employee or his dependent on account of an injury, or compensable sickness or disease for which he is entitled to compensation under this Chapter, shall be exclusive of all other rights, remedies, and claims for damages, including but not limited to punitive or exemplary damages, unless such rights, remedies, and damages are created by a statute, whether now existing or created in the future, expressly establishing same as available to such employee, his personal representatives, dependents, or relations, as against his employer, or any principal or any officer, director, stockholder, partner, or employee of such employer or principal, for said injury, or compensable sickness or disease.

(b)  This exclusive remedy is exclusive of all claims, including any claims that might arise against his employer, or any principal or any officer, director, stockholder, partner, or employee of such employer or principal under any dual capacity theory or doctrine.

(2)  For purposes of this Section, the word "principal" shall be defined as any person who undertakes to execute any work which is a part of his trade, business, or occupation in which he was engaged at the time of the injury, or which he had contracted to perform and contracts with any person for the execution thereof.

B.  Nothing in this Chapter shall affect the liability of the employer, or any officer, director, stockholder, partner, or employee of such employer or principal to a fine or penalty under any other statute or the liability, civil or criminal, resulting from an intentional act.

C.  The immunity from civil liability provided by this Section shall not extend to:

(1)  Any officer, director, stockholder, partner, or employee of such employer or principal who is not engaged at the time of the injury in the normal course and scope of his employment; and

(2)  To the liability of any partner in a partnership which has been formed for the purpose of evading any of the provisions of this Section.

Amended by Acts 1976, No. 147, §1; Acts 1989, No. 454, §2, eff. Jan. 1, 1990; Acts 1995, No. 432, §1, eff. June 17, 1995.

§1205.  Claim for payments; privilege of employee; non-assignability; exemption from seizure; payment of denied medical expenses

A.  Claims or payments due under this Chapter shall have the same preference and priority for the whole thereof against the assets of the employer as is allowed by law for any unpaid wages of the laborer; and shall not be assignable, and shall be exempt from all claims of creditors and from levy or execution or attachment or garnishment, except under a judgment for alimony in favor of a wife, or an ascendant or descendant.

B.  Any company which contracts for health care benefits for an employee shall have a right of reimbursement against the entity responsible for the payment of workers' compensation benefits for such employee if the company paid health care benefits for which such entity is liable.  The amount of reimbursement shall not exceed the amount of the entity's liability for the workers' compensation benefit.  In the event the company seeks recovery for such in conjunction with a claim against any other party brought by the employee, the company may be charged with a proportionate share of the reasonable and necessary costs, including attorney fees, incurred by the employee in the advancement of his claim or suit.

C.(1)  In the event that the workers' compensation payor has denied that the employee's injury is compensable under this Chapter, then any health insurer which contracts to provide health care benefits for an employee shall be responsible for the payment of all medical benefits pursuant to the terms of the health insurer's policy.  Any health insurer which contracts to provide health care benefits for an employee who violates the provisions of this Subsection shall be liable to the employee or health care provider for reasonable attorney fees and costs related to the dispute and to the employee for any health benefits payable.

(2)  The payment of medical expenses shall be recoverable pursuant to and in accordance with Subsection B of this Section.  However, if it is determined that the worker's compensation payor was responsible for payment of medical benefits that have been paid by the health insurer, the obligation of the worker's compensation payor for such benefits shall be to reimburse the health insurer one hundred percent of the benefits it paid.  If it is determined that the worker's compensation payor was responsible for payment of benefits and its denial of responsibility is determined to be arbitrary and capricious, then the health insurer shall also be entitled to recover legal interest on any benefits it paid, calculated from the date such benefits were due.

(3)  Any claim filed against the worker's compensation carrier by the health insurer or health providers in accordance with this provision shall not be subject to timely filing requirements, nor does prescription run until such time as the workers' compensation claim reaches a resolution by final judgment or settlement.

(4)  Any claim filed by a health care provider against a health insurer pursuant to this Section shall be filed no later than one hundred eighty days after the denial by the worker's compensation payor.

Acts 1995, No. 449, §1; Acts 2004, No. 554, §1.  

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