Gloucester Personal Injury Attorney John Singleton Explains What Health Insurers Can and Cannot Recover From a Virginia Injury Settlement

HAYES, VA - August 14, 2026 - Virginia law generally bars private health insurers from claiming reimbursement out of a personal injury settlement, but that protection is far from absolute once federal programs and statutory lienholders enter the picture. Gloucester personal injury attorney John Singleton of GibsonSingleton Virginia Injury Attorneys (https://www.gibsonsingleton.com/blog/can-health-insurance-companies-get-reimbursed-after-a-personal-injury-payout/) explains which plans can still collect from an injury payout before an injured person ever sees a check.

According to Gloucester personal injury attorney John Singleton, subrogation is the mechanism that allows an insurer who paid an injured person's medical bills to seek reimbursement from money later recovered against the at-fault party. "Virginia has a strong anti-subrogation rule, but it does not reach every type of coverage," Singleton explains. "Knowing which rule applies to a specific plan is often the difference between keeping a full settlement and handing part of it back."

Gloucester personal injury attorney John Singleton notes that under Virginia Code 38.2-3405, covered private accident and sickness insurance policies generally cannot include provisions letting the insurer recover from a personal injury settlement, a protection that applies to most fully insured private health plans sold in the Commonwealth. That rule, however, does not reach self-funded employer plans governed by federal law or any program backed by the federal government.

The firm also distinguishes between subrogation, a lien, and reimbursement, three related but distinct concepts that can each reduce a settlement. Subrogation is the insurer's right to step into an injured person's shoes and pursue the at-fault party directly, a lien is a legally enforceable claim against the settlement proceeds themselves, and reimbursement is the actual repayment a program ultimately receives, whether through subrogation or a lien. Virginia's made-whole doctrine can apply to certain conventional subrogation disputes but generally does not override statutory liens or federal program recovery rights.

Attorney Ken Gibson, who co-founded the firm with Singleton, points to several federal programs that retain statutory reimbursement rights regardless of Virginia's anti-subrogation rule, including Medicare, Virginia Medicaid, TRICARE, and self-funded ERISA and FEHBA health plans. "Medicare's conditional payment rules carry real teeth, including mandatory reporting obligations," Gibson notes. "Ignoring a valid Medicare or Medicaid lien can delay a settlement and create complications that are avoidable with early planning."

The firm explains that workers' compensation carriers hold a separate and strong statutory lien under Va. Code 65.2-309 when a workplace injury also gives rise to a third-party personal injury claim, though that lien is not always paid in full. Under Va. Code 65.2-311, a carrier generally must account for a proportionate share of reasonable attorney's fees and litigation expenses, which can meaningfully reduce its ultimate recovery.

Medical expense benefits, commonly called MedPay, work differently than health insurance. Virginia Code 38.2-2209 generally bars a motor vehicle medical-benefit insurer from asserting a subrogation right against a third-party recovery, meaning MedPay often functions as money an injured person simply keeps while their case is pending, helping cover deductibles without reducing the eventual settlement.

Attorney Singleton adds that identifying every applicable program early gives a client a clear picture of their true net recovery well before any offer is accepted. "A valid lien is not automatically a full-price lien," he notes. "There is almost always room to negotiate once the charges are reviewed line by line."

Understanding which sources may need to be repaid, and which sources an injured person can simply keep, helps Gloucester County families make an informed decision about any settlement offer before they accept it.

About GibsonSingleton Virginia Injury Attorneys:

GibsonSingleton Virginia Injury Attorneys is a Hayes-based law firm dedicated to personal injury representation for clients throughout Gloucester County, the Middle Peninsula, and Hampton Roads. Led by attorneys Ken Gibson and John Singleton, the firm helps injured clients identify, challenge, and reduce liens and reimbursement claims asserted against their settlements. For consultations, call (804) 413-6777.

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