May 24, 2019
Bill to address medical expenses after auto accident passes Assembly
A bill (S-2432), which would clarify the law regarding unpaid or uncovered medical expenses that occur after an auto accident, passed the state Assembly (53-3-10) on May 23.
The bill would clarify that all medical expenses that exceed, or are unpaid or uncovered by any injured party’s automobile insurance medical expense benefits personal injury protection coverage—regardless of any health insurance coverage—are claimable by any injured party as against all liable parties. This includes any self-funded health-care plans that assert valid liens.
This legislation is in direct response to the recent New Jersey Supreme Court case Haines v. Taft. In that case, the plaintiff was injured in an auto accident, but he only carried $15,000 in PIP coverage. The medical costs exceeded the $15,000 in coverage and the plaintiff sued to reclaim the excess claiming the loss as economic loss.
The court rejected this attempt to claim coverage stating that the no-fault system was designed to limit the ability to sue when an auto accident occurs. Allowing a plaintiff to claim economic loss for excess medical payments would run counter to the goal of a no-fault system. In addition, the court held that allowing excess medical to be claimed as economic loss could create the consequence whereby someone who chooses a lower PIP coverage option could receive a higher overall reimbursement than one who elected for a $250,000 PIP coverage policy, the default in New Jersey.
The bill passed the Senate on May 13, and it now will go to the Gov. Phil Murphy for his consideration.