UC Berkeley Professor Claims Employer Unlawfully Demanded Reimbursement of Insurance Recovery

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A proposed class action filed in California claims Regents of the University of California and Blue Shield of California unlawfully demanded reimbursement from an employee’s uninsured and underinsured (UM/UIM) coverage after he was injured in an automobile accident.

On May 2, 2016, the suit begins, the plaintiff was reportedly involved in a serious car accident and sustained injuries that required “hospitalization and extensive treatment.” The man, a professor at UC Berkeley Law School, was insured under a health plan provided by the defendants that paid for his medical expenses, the case explains, which exceeded $500,000.

According to the complaint, the plaintiff’s UM/UIM policy provided $485,000 in coverage, after considering the $15,000 worth of liability insurance carried by the driver that caused the accident. The lawsuit explains that the defendants made a claim for reimbursement from the plaintiff’s UM/UIM recovery, which the case argues is unlawful under the state’s insurance code. The code, the case notes, states that the plaintiff’s UM/UIM coverage cannot be recovered as “primary or excess coverage” by entities affiliated with the United States government, such as Regents:

"The insurance coverage provided for in this section does not apply either as primary or as excess coverage" (4) "In any instance where it would inure directly or indirectly to the benefit of any workers' compensation carrier or … to any person qualified as a self-insurer under any workers' compensation law, or directly to the benefit of the United States, or any state or any political subdivision thereof."

As a “political subdivision of the State of California,” Regents cannot demand reimbursement from the plaintiff’s insurance coverage, the lawsuit argues. The man’s attorney allegedly notified the defendants of their apparent violation of the state’s insurance code, but, according to the complaint, the parties have insisted that they retain a right to reimbursement.

Originally filed in state court, the lawsuit has recently been removed to the District Court for the Northern District of California.