Subrogation for Workers’ Compensation
Subrogation is an important part of Pennsylvania workers’ compensation law. The underlying principle is that an employer is entitled to be repaid for the workers’ compensation benefits that it paid to an injured worker as a result of the negligence of a third party.
In Pennsylvania, an injured employee is entitled to workers’ compensation benefits if he or she is hurt while in the course of employment. It is not a defense to a work comp claim that the injury was caused by a third party – for example, if your injury was caused by defective machinery or the negligence of some third party not your employer, you are entitled to workers’ compensation.
In that scenario, however, if you then file a lawsuit against the negligent third party, you have to repay your employer workers’ compensation benefits that it paid from any award or settlement that you receive as a result of that lawsuit. (It is not a dollar-for-dollar repayment; rather, there is an intricate and complicated formula).
The employer’s right of subrogation has largely been found by the courts to be something that cannot be defeated. However, the Workers’ Compensation Act provides that a governmental entity is immune from claims of subrogation or reimbursement from a claimant’s tort recovery.
In Frazier v. W.C.A.B. (Bayada Nurses, Inc.) a nurse was on a SEPTA bus while traveling for work. The bus was involved in an accident, and she broke her ankle. She subsequently settled her case against SEPTA for $75,000. As part of the settlement, SEPTA agreed that it would defend, indemnify and hold Claimant harmless with respect to any claim, suit, petition or other action brought against Claimant for payment of the workers’ compensation lien.
Even though SEPTA qualifies as a governmental entity, Bayada Nurses filed for repayment of the workers’ compensation benefits that it had paid. The workers’ compensation judge found that Bayada was not entitled to subrogation, but the Workers’ Compensation Appeal Board reversed the judge. The Commonwealth Court affirmed the W.C.A.B. However, the Pennsylvania Supreme Court found that the workers’ compensation judge was correct and reinstated the decision of the workers’ compensation judge.
Accordingly, if you are paid workers’ compensation benefits as a result of an accident caused by a governmental entity, your employer is not necessarily entitled to subrogate against a settlement or award between the employee and the governmental entity.
The law firm of Calhoon and Kaminsky P.C., represents injured workers and Social Security Disability applicants throughout Pennsylvania, including (but not limited to): Allentown, Altoona, Bellefonte, Bethlehem, Bloomsburg, Carlisle, Chambersburg, Easton, Enola, Fayetteville, Gettysburg, Harrisburg, Hazelton, Hollidaysburg, Huntingdon, Lancaster, Lebanon, Lewisburg, Lewistown, McConnellsburg, Mechanicsburg, Mifflintown, Millersburg, Milton, New Bloomfield, Newport, Philadelphia, Pittsburgh, Pottsville, Reading, Scranton, Shippensburg, State College, Sunbury, Uniontown, Washington, Wellsboro, Wilkes-Barre, Williamsport, York and all cities and towns in Adams County, Allegheny County, Berks County, Blair County, Bucks County, Centre County, Chester County, Clinton County, Columbia County, Cumberland County, Dauphin County, Fayette County, Franklin County, Fulton County, Huntingdon County, Juniata County, Lancaster County, Lebanon County, Lehigh County, Luzerne County, Lycoming County, Mifflin County, Montgomery County, Northumberland County, Perry County, Philadelphia County, Schuylkill County, Tioga County, Union County, Washington County and York County, Pennsylvania.
