Full Version: A new Low for Walmart
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Debbie Shank stocked shelves at a Wal-Mart store in Cape Girardeau, Mo., until five years ago, when her minivan was hit by a tractor-trailer. Her Wal-Mart health insurance paid the medical bills. Proceeds from a lawsuit helped finance her care in a nursing home.
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Now the Shanks face a new obstacle. Her Wal-Mart health insurance plan wants the lawsuit money to repay its costs. Last week, the health plan sued Debbie Shank in federal court in St. Louis, demanding the full $417,000 she got in the civil suit - plus at least $51,000 more from the share that already went to lawyers and costs.
sourceAccording to the article these suits are not that uncommon. In Walmart's defense, a spokesman said that the company has not decided as yet, if they will pursue the case, but suit was filled as a sort of "legal foot in the door" before the legal window to fill the case passed.
This woman, is confined to a wheelchair, and will require nursing home care for the rest of her life. The cost for this will likely be millions, well beyond the settlement.
This suit would not even be possible if Walmart was not self-insured.
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Lawyers familiar with employment law said that while state law generally bars a health insurance company from trying to get a piece of a settlement, self-funded health plans are allowed under federal law to recover their costs.
Questions for Debate:
Why do we treat self-insured companies differently when it comes to regulation and insurance law? What is gained by doing this?
Should we enact new laws to require that all self-insured companies operate their insurance to a least the standards we require of Insurance companies? What is lost if we do this?
Do you think, now that this issue is getting press coverage, that Walmart will go forward with the suit?
(For those still shopping at Walmart) Does this story cause you to reconsider shopping at Walmart in the future?
Walmart employs approximately 1 million people. Each of these people pay into an insurance fund (if it is anything like the self funded plan I am in). The costs for everyone's health care is paid through this contribution, along with some contribution from the company.
This woman won an award to pay for her health care due to the accident. These bills have been paid out of this fund. The money should be used for her care, which has been paid for by the plan. It might seem cold, but the money would then be used for exactly what it was awarded to do: pay her health bills.
I'm not sure that the plan will chuck her and not pay in the future. If that is the case, then that is certainly cold. But what is being considered here is not. She shouldn't get rich by being in an accident. Her bills should be paid.
If the plan did not do this, then everyone in the plan would owe more.
Now, I notice you didn't touch on how the lawyers got such a huge piece of the pie. I know it is a different issue, but I think this woman's attorneys should feel bad if Walmart goes ahead with this suit (and wins, as I am almost certain they would).
Why do we treat self-insured companies differently when it comes to regulation and insurance law? What is gained by doing this?
Many private companies would simply not offer insurance (or would offer expensive third party plans) if having such a plan meant an open-ended obligation to care for anything that happens.
Should we enact new laws to require that all self-insured companies operate their insurance to a least the standards we require of Insurance companies? What is lost if we do this?
Regular insurance companies make a profit. Private plans do not. Private plans must insure those employees who opt in, regular insurance policies can screen applicants. As I stated above, raise the risks of operating a plan like this one and many companies would not offer them.
Do you think, now that this issue is getting press coverage, that Walmart will go forward with the suit?
Walmart is a large, profitable company. I would think it would make good business sense for this to go away quietly.
(For those still shopping at Walmart) Does this story cause you to reconsider shopping at Walmart in the future?
No. As long as they offer the same stuff as other stores (CDs, food, computer gear, etc) for cheaper prices than others, I will still shop there, as will millions of other Americans. Cheaper prices and the same product means alot to people on a budget.
This woman won an award to pay for her health care due to the accident. These bills have been paid out of this fund. The money should be used for her care, which has been paid for by the plan. It might seem cold, but the money would then be used for exactly what it was awarded to do: pay her health bills.
I'm not sure that the plan will chuck her and not pay in the future. If that is the case, then that is certainly cold. But what is being considered here is not. She shouldn't get rich by being in an accident. Her bills should be paid.
If the plan did not do this, then everyone in the plan would owe more.
Now, I notice you didn't touch on how the lawyers got such a huge piece of the pie. I know it is a different issue, but I think this woman's attorneys should feel bad if Walmart goes ahead with this suit (and wins, as I am almost certain they would).
Why do we treat self-insured companies differently when it comes to regulation and insurance law? What is gained by doing this?
Many private companies would simply not offer insurance (or would offer expensive third party plans) if having such a plan meant an open-ended obligation to care for anything that happens.
Should we enact new laws to require that all self-insured companies operate their insurance to a least the standards we require of Insurance companies? What is lost if we do this?
Regular insurance companies make a profit. Private plans do not. Private plans must insure those employees who opt in, regular insurance policies can screen applicants. As I stated above, raise the risks of operating a plan like this one and many companies would not offer them.
Do you think, now that this issue is getting press coverage, that Walmart will go forward with the suit?
Walmart is a large, profitable company. I would think it would make good business sense for this to go away quietly.
(For those still shopping at Walmart) Does this story cause you to reconsider shopping at Walmart in the future?
No. As long as they offer the same stuff as other stores (CDs, food, computer gear, etc) for cheaper prices than others, I will still shop there, as will millions of other Americans. Cheaper prices and the same product means alot to people on a budget.
QUOTE(Amlord @ Aug 29 2005, 10:29 PM)
This woman won an award to pay for her health care due to the accident. These bills have been paid out of this fund. The money should be used for her care, which has been paid for by the plan. It might seem cold, but the money would then be used for exactly what it was awarded to do: pay her health bills.
I understand your point. However, this woman also paid into that fund. The basic purpose of Insurance is to pay a known loss regularly to avoid an unknown loss in the future. She upheld here end.
Will Walmart be deducting what she paid into the plan from what they take from her? Since she will need life long care at this point, will they take the settlement and continue to pay for her care?
What about:
QUOTE
HEALTH BENEFITS
Our health plan covers most major medical expenses. The company contributes to the cost of health benefits and we offer affordable Associate plans. There is no limit for most health coverage.
sourceOur health plan covers most major medical expenses. The company contributes to the cost of health benefits and we offer affordable Associate plans. There is no limit for most health coverage.
According to Walmart. There is no limits for "most" health coverage.
So, if they are going to stay true to that statement, and continue to pay for her care for the rest of her life, then yes I would support them getting the settlement.
However, if they are not, then they should drop this because the settlement money is alot less then her care is likely to cost.
The worst part to me is:
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the health plan sued Debbie Shank in federal court in St. Louis, demanding the full $417,000 she got in the civil suit - plus at least $51,000 more from the share that already went to lawyers and costs
So, they are expecting her to pay $51,000.00 above what she was awarded? What is that, like 3 years salary at Walmart?
As for the lawyers, yes their share is high. However, this woman was a stocker at Walmart. I think it should be obvious that she could not afford to pay conventional lawyer's fees. As a result, she had to use a contingency lawyer. The trade off there is that when they win they make more because they are taking all the financial risks. That's Capitalism.
Maybe if we had tort reform where the looser of a suit paid the winner's legal fees we would not have as much need for contingency lawyers.
Walmart is playing fast and loose with what Insurance is supposed to be. I feel, all insurance, self-insured or otherwise should be regulated the same way. If this results in places like Walmart dropping insurance coverage, well, at least the employees will no longer have to pay to get screwed.
I guess what you are arguing is that the money should be used for her continuing care rather than the bills associated with her immediate care following the accident. We would need to look into the judgement to see what the verdict said.
It seems to me like the lawyer was a bit negligent (or perhaps, naive) in his handling of this situation. He didn't call Wal-Mart's lawyers back.
From your article:
It may be true that Shank herself never go the amount sought, but her husband got the extra cash:
The husband has been negligent here.
He obviously disregarded the fact that the plan was legally entitled to the money. Instead of working out a deal (i.e. continuing care to be paid out of any settlement) he just ignored the situation.
This is tragic, but the insurance company has a legitimate right to the money.
It seems to me like the lawyer was a bit negligent (or perhaps, naive) in his handling of this situation. He didn't call Wal-Mart's lawyers back.
From your article:
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The health plan's suit says it was never notified of the settlement or the creation of the trust, and Shank and her lawyers were repeatedly told that the health plan expected "100 percent repayment."
It may be true that Shank herself never go the amount sought, but her husband got the extra cash:
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The Shanks settled in August 2002 for $900,000. After attorneys' fees and expenses, an irrevocable trust set up for Debbie Shank got $417,477 and her husband got $119,280, according to court documents.
The husband has been negligent here.
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Jim Shank has dreaded something like this since he got a letter two weeks after the accident, while his wife was still in intensive care, "clinging to life."
He recalls the letter saying he had to sign over any right to lawsuit proceeds or the health plan would not pay for his wife's care.
He recalls the letter saying he had to sign over any right to lawsuit proceeds or the health plan would not pay for his wife's care.
He obviously disregarded the fact that the plan was legally entitled to the money. Instead of working out a deal (i.e. continuing care to be paid out of any settlement) he just ignored the situation.
This is tragic, but the insurance company has a legitimate right to the money.
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