How Much Must Be Repaid?

The reimbursement amount depends on two key factors:

1. Policy Language
2. The Source of the Settlement or Judgment

Most policies state that the insurer is entitled to full reimbursement from the insured’s recovery—often before the insured or their attorney receives anything. However, when the recovery is from a tortfeasor (the at-fault party), Florida law may limit the insurer’s rights.

Florida Statute § 768.76(4): The Governing Rule

When recovery is made from a tortfeasor, Florida Statute § 768.76(4) controls, regardless of what the insurance policy says. This was confirmed in Ingenix v. Ham, 35 So. 3d 949 (Fla. 2d DCA 2010). In that case, United Healthcare sought full reimbursement after paying most of the decedent’s medical bills. However, the court limited reimbursement based on the statutory formula in § 768.76(4), stating:

“A provider of collateral sources…shall have a right of reimbursement…if such claimant has recovered…from a tortfeasor.”

A Different Outcome: When the Statute Doesn’t Apply

In contrast, Travelers v. Boyles, 679 So. 2d 1188 (Fla. 4th DCA 1996), involved a settlement with an uninsured motorist (UM) carrier—not a tortfeasor. The court held that § 768.76(4) did not apply and allowed the health insurer to pursue full reimbursement under its policy terms. The statute wasn’t triggered because a UM carrier is not considered a tortfeasor under the law.

Importantly, the Ingenix court emphasized that the Travelers decision does not mean policy language trumps the statute when § 768.76(4) does apply.

When Both Standards Apply

In certain cases—such as auto accidents involving inadequate bodily injury (BI) coverage and a payment from an underinsured motorist (UIM) policy—both Ingenix and Travelers may apply. Reimbursement rights may then be split between the statutory formula (for the tortfeasor’s share) and policy language (for the UIM portion).

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Contact us at 305-758-4900 or by email (kgale@jeffgalelaw.com and jgale@jeffgalelaw.com) to learn your legal rights.

Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.

While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are “people” and not “cases” or “files.” We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.

DISCLAIMER: This information provided by Jeffrey P. Gale, P.A. is for informational purposes only and is intended to be used as a non-legal guide prior to consultation with an attorney familiar with your specific legal situation. It should not be considered legal advice or counseling. No such legal advice or counseling is either expressly or impliedly intended. This information is not a substitute for the advice or counsel of an attorney. If you require legal advice, you should seek the services of an attorney.

Florida Statute 440.39(2) provides that “the employer or, in the event the employer is insured against liability hereunder, the insurer shall be subrogated to the rights of the employee or his or her dependents against such third-party tortfeasor.” This means that the employer and its workers’ compensation insurance carrier are entitled to recover a portion of their expenditures from money the injured employee receives from the at-fault third party.

Typically, it is not a dollar-for-dollar recovery. The formula for the recovery is contained in section 440.39(3)(a).

The formula’s interpretation has been challenged. Manfredo v. Employer’s Casualty Insurance Company, 560 So.2d 1162 (Fla 1990) put much of the uncertainty to rest. Manfredo explained that the percentage of the employer/carrier’s recovery is determined as follows:

Step 1. Establish the “full value” of the liability case.

Step 2. Reduce the actual recovery by attorney’s fees and costs to reach a net recovery.

Step 3. Divide the net recovery by the full value.

Step 4. The result in Step 3 is the percentage of the subrogation lien the employer/carrier is allowed to recover.

Let’s say the employer/carrier’s subrogation lien totals $100,000, and the net recovery divided by the full value is 20%, the employer/carrier’s recovery is $20,000.

Determining full value is an evidentiary matter. Experts, usually seasoned personal injury lawyers, give their opinions based on the facts of the particular case and their experience. The judge decides what evidence to accept.

Florida is a comparative fault state. See Florida Statute 768.81. This means that a tortfeasor only pays for damages in proportion to his or her percentage of fault. For example, if damages are $1,000,000, but the tortfeasor is only 60% at fault for causing the accident which has resulted in the damages, the at-fault party’s share is limited to $600,000.

Interestingly, comparative fault cannot be argued to reduce full value. See City of Hollywood v. Lombardi, 770 So. 2d 1196 (Fla. 2000) and Luscomb v Liberty Mut. Ins. Co., 967 So. 2d 379 (Fla. 3rd DCA 2007).

Another common factor preventing full recoveries is limited insurance coverage. Very few individuals maintain large bodily injury and uninsured/underinsured motorist insurance policy limits — I consider $1 million and above to be large. Damages usually exceed coverage limits.

While the cases cited in the section above discussing comparative fault do not explicitly say that limited coverage can be argued to reduce the full value assessment, it is my opinion that it cannot. There is nothing in the statute or the cases interpreting the statute saying it can. The language of the statute suggests that it cannot. Section 440.39(3)(a) contains the following language:

“[T]he employer or carrier shall recover from the judgment or settlement, after costs and attorney’s fees incurred by the employee or dependent in that suit have been deducted, 100 percent of what it has paid and future benefits to be paid, except, if the employee or dependent can demonstrate to the court that he or she did not recover the full value of damages sustained, the employer or carrier shall recover from the judgment or settlement, after costs and attorney’s fees incurred by the employee or dependent in that suit have been deducted, a percentage of what it has paid and future benefits to be paid equal to the percentage that the employee’s net recovery is of the full value of the employee’s damages.”

Moreover, the Lombardi case involved a compromised policy limits settlement of $100,000 in which the trial court calculated full value at $250,000. The insurance company did not argue that full value should be limited to the $100,000 settlement.

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Contact us at 305-758-4900 or by email to learn your legal rights.

Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.

While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are “people” and not “cases” or “files.” We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.

DISCLAIMER: This information provided by Jeffrey P. Gale, P.A. is for informational purposes only and is intended to be used as a non-legal guide prior to consultation with an attorney familiar with your specific legal situation. It should not be considered legal advice or counseling. No such legal advice or counseling is either expressly or impliedly intended. This information is not a substitute for the advice or counsel of an attorney. If you require legal advice, you should seek the services of an attorney.