What Comes Out of a New Hampshire Injury Settlement Before You Get Paid
In New Hampshire, the injury settlement number an adjuster offers you is a gross number. Whoever paid your medical bills while you were hurt, a health plan, New Hampshire Medicaid, Medicare, or a workers' compensation carrier, may have a right to be repaid out of that money.
Picture the ordinary version of this. You are injured in a crash in Goffstown that was not your fault. The injuries are real but the case looks simple, so you decide not to hire anybody and handle it yourself. Months later the adjuster calls with a number. Measured against your lost wages and what you have been through, it sounds fair, and you take it. Then the letters start arriving, and each one is from an organization that paid a medical bill for you and now wants its money back out of the settlement you just accepted. Ouch...
This post is about the arithmetic. Whether a first offer is too low is a separate question, and it is covered at should I accept the insurance company's first offer. What follows assumes the number is already offered and asks what happens to it next.
What is the lesson to be learned after reading this article? Do not accept an offer unless you know what liens need to be repaid. Your net recovery must calculate the payment of the lien.
Somebody else paid your medical bills
Very few injured people pay their own medical bills in real time. Something else pays them: a private health plan, Medicare, Medicaid, an employer's workers' compensation carrier, or the medical payments coverage on your auto policy.
Four of those five have a right to be reimbursed for what they furnished, and the rights come from two different places. A private health plan's right comes from the contract you signed when you enrolled. Medicare's, Medicaid's, and the workers' compensation carrier's come from statute, which means they exist whether or not anyone agreed to them and whether or not you have read a word of the policy. Either way, the right attaches to your settlement. Two people with identical herniated discs and identical settlements can keep different amounts.
The fifth, medical payments coverage, does not create a lien in New Hampshire. It runs the other way, and it is taken up at the end.
Three New Hampshire lien statutes, one phrase, and no formula behind any of them
Most personal injury claims settle without a lawsuit ever being filed. The statutes below matter most as leverage in a negotiation. They say what a decision-maker would do if asked, and that is what a lienholder measures against when it decides whether to take less. A letter that shows what a court could order is a different letter from one that asks a favor. Two of the three statutes also reach a settlement directly: a workers' compensation settlement is not binding until it is approved, RSA 281-A:13, III(a), and the Medicaid procedure runs off a settlement as well as a trial, RSA 167:14-a, IV.
New Hampshire law then gives that decision-maker the same instruction in three separate places.
RSA 281-A:13, IV, the workers' compensation lien: the decision-maker "shall order such division of expenses and costs of action . . . as justice may require."
RSA 507:7-j, a health plan or a medical provider claiming reimbursement: the court "shall order such division of expenses and costs of the action . . . as justice may require."
RSA 167:14-a, IV, New Hampshire Medicaid: the court has "broad discretion to apportion the amount withheld as justice may require."
The New Hampshire Supreme Court was asked, in Gelinas v. Sterling Industries Corp., 139 N.H. 14 (1994), to supply the formula for the first of them. It declined: "Since the determination of the lien holder's just share is uniquely within the broad discretion of the district court, we do not attempt to state a rule of law on this question." 139 N.H. at 19.
Every reduction available against a lien in New Hampshire is discretionary. A discretionary reduction is not applied to you automatically. Somebody has to ask for it, and the asking usually happens in a letter to the lienholder long before any hearing, backed by what a court could order if the letter is refused. What it does not do is happen by itself.
A private health plan's claim comes from its contract
A health insurer in New Hampshire has no automatic right to be repaid out of your recovery. It gets one only because its policy says so, and it gets no more than the policy gives it. Langevin v. Travco Insurance Co., 170 N.H. 660, 669 (2018), states the position: health insurers "may acquire subrogation rights by contract, via their policies with insureds."
The number on that demand letter is a starting point rather than a fixed figure, and several things bear on where it ends up.
A claim of this kind reaches only treatment for this injury. The workers' compensation lien runs to care "already paid or agreed or awarded to be paid" for the compensable injury, RSA 281-A:13, I(b); the State's Medicaid claim runs "to the extent that such assistance is furnished," RSA 167:14-a, I; a health plan reaches what its policy covers for this loss. A carrier builds its demand from its own claims records, so where there was a prior injury, a chronic condition, or treatment that overlapped the accident, the figure can include care that has nothing to do with the crash. Whether the number is right comes before whether it can be reduced.
A plan can be made to share the cost of the recovery it is paid out of. Where a health carrier or a medical provider claims reimbursement of medical expenses from your recovery, RSA 507:7-j directs the court to divide "expenses and costs of the action, including attorneys' fees," among you, the carrier, and the provider, "as justice may require." The plan is repaid out of a fund that exists only because somebody investigated the claim, proved it, and paid the costs of doing so, and plans that are not self-funded frequently negotiate on that reasoning without going to court.
Whether a plan should be paid in full at all is a narrower question, and New Hampshire keeps it narrow. In Dimick v. Lewis, 127 N.H. 141 (1985), Blue Cross/Blue Shield had paid $41,217.91 in medical benefits for a teenager hurt in a motorcycle collision, and the case settled for the driver's $101,000 policy limit. 127 N.H. at 142-43. The opinion states the rule with its qualification attached: subrogation "is generally not allowed where the insured's total recovery is less than the insured's actual loss," though the rule "is usually applied . . . in cases where there is a recovery in full upon a judgment, and in absence of express contract terms." 127 N.H. at 144.
Roy v. Ducnuigeen, 130 N.H. 24, 26 (1987), then holds that a case settled below the defendant's policy limits is not a reduced recovery, because there is "no reason to assume that a plaintiff who settles for less than the defendant's policy limits has acted irrationally in choosing not to test the value of his claim by litigating his case to verdict." Most settlements are below the limits, so for most claimants this argument is closed. A verdict cut by the claimant's own share of fault sits closer to the rule, because there the loss was measured rather than assumed, though no New Hampshire decision has applied it to that situation.
How a settlement is allocated bears on what a claim can reach, and Dimick marks the limit of that too. The family's petition there gave only $1,996 to the parents, whom the insurer was subrogated to, against medical expenses of $43,423.26, and the Court held that plaintiffs "cannot jeopardize the insurer's position by making a unified claim for insured and uninsured losses and then unilaterally allocate only a small portion of the settlement to the parents in order to frustrate the insurer's rights." 127 N.H. at 145. An allocation that reflects the case holds; one built to defeat the claim does not.
One threshold question changes all of this, and it is federal. If your employer funds its health plan rather than buying insurance, the plan is exempt from state insurance regulation under 29 U.S.C. § 1144(b)(2)(B), the ERISA deemer clause, as construed in FMC Corp. v. Holliday, 498 U.S. 52 (1990). The consequence is direct: none of the New Hampshire law in this section reaches that plan, and the plan document governs instead. You are entitled to demand that document in writing under 29 U.S.C. § 1024(b)(4). Whether your employer insures or self-funds is not something you can tell from the card in your wallet, and it decides which rules you are arguing under.
Medicare reduces for fees and costs, and the reduction is a regulation
Medicare's recovery right is federal and it operates on its own schedule. Four things about it change what a claimant does.
Medicare reduces its recovery to account for the cost of procuring the settlement, and that reduction lives in a 1989 regulation, 42 C.F.R. § 411.37, rather than in the Medicare statute. The words "procure" and "procurement" do not appear in 42 U.S.C. § 1395y at all.
Where Medicare paid as much as or more than the settlement, § 411.37(d) sets the recovery at "the total judgment or settlement payment minus the total procurement costs." A large Medicare lien can consume a settlement down to fees and costs.
The reduction is not unconditional. It applies where the costs were incurred "because the claim is disputed," § 411.37(a)(1)(i), and the formula gets worse if the government has to sue to collect. § 411.37(e).
In practice, the reduction is administered through a conditional payment process with response deadlines that are set by agency operating procedure rather than by statute or regulation. Missing one of those deadlines can produce a demand with no reduction in it. The protection is real, and it is losable by silence.
New Hampshire Medicaid assigns your claim the day you accept benefits
Everything in the health plan section above turns on a contract. Medicaid does not. Its claim is created by statute, it arises without a signature, and no policy language limits it.
RSA 167:14-a, I does something no other payer does. A recipient "shall, by his acceptance of such assistance, be deemed to have assigned any claim or right of action against any person or party to the commissioner of health and human services," to the extent of the assistance furnished. Your claim against the driver who hurt you is assigned to the State the day you accept the benefit. Nobody signs anything.
The statute then builds a procedure with hard numbers in it. Under RSA 167:14-a, IV, no disbursement may be made to a recipient without at least 30 days' written notice to the commissioner of any scheduled trial, alternative dispute resolution hearing, or settlement, or a written release. The commissioner has 21 days to state the amount of the claim. If the amount is disputed, that sum is withheld from the settlement, and either side may apply to a court to apportion it. The court has "broad discretion to apportion the amount withheld as justice may require," and its order "has the effect of a judgment."
A court has more power here than it has over a private health plan. Against a plan, RSA 507:7-j lets the court make the carrier pay a share of the legal costs. Against the State, the court can cut the debt itself. The power is easy to leave unused for a plain reason: it exists only if somebody applies for the order, and nothing obliges the State to mention that it is available.
One paragraph runs the other way, and it is the trap in the section. RSA 167:14-a, III-a lets the commissioner "waive or reduce the amount due the state for good cause upon written request." The next sentence provides that "[t]he acceptance of any waiver or the payment of any reduced amount due shall create a rebuttable presumption that the apportionment was equitable in any action brought pursuant to paragraph IV." Read the two together and the sequence is this. The State offers to take less. You accept. If you later go to court under paragraph IV and ask for a bigger cut, you now walk in with a presumption against you, because accepting the State's number is treated as evidence that the State's number was fair. The reduction that felt like a win is the reason the better one is harder to get.
Two more facts about the New Hampshire program are worth having.
The demand letter probably will not come from the State. Since September 1, 2019, the Department of Health and Human Services has routed accident and trauma subrogation cases to the managed care organizations that paid the claims, and the implementing rules, N.H. Admin. Code He-W 521.08 through 521.11, speak throughout of "the department or MCO." The statutory assignment still runs to the commissioner. The entity writing to you may be a health plan or its recovery vendor, and the letter can read like a private insurance claim when the right behind it is statutory.
An older rule is gone. Before 2010, the statute allowed the State to recover only from proceeds remaining after fees, costs, other creditors' claims, and 10 percent of the remaining net settlement for the recipient. The 2010 amendment struck that 10 percent floor. Anyone still counting on it is relying on a version of the law that is sixteen years out of date.
If you were working when you were hurt, a fourth mechanic applies
This branch changes the picture most, and it applies only where somebody other than the employer caused a work injury. A delivery driver rear-ended on Route 101. An employee sent across town in a company car and hit at an intersection. Workers' compensation pays, and the carrier then has a statutory claim on whatever is recovered from the driver who caused it.
RSA 281-A:13, I(b) gives the carrier a lien on the damages recovered, less the expenses and costs of action, to the extent of what it has paid or agreed or awarded to be paid, less the carrier's pro rata share of those expenses and costs as determined under paragraph IV.
The lien is stronger than most people expect in three specific ways, and it is not limited to your medical bills. Tarr v. Republic Corp., 116 N.H. 99, 105 (1976), holds it reaches damages for pain and suffering too.
It attaches on its own. Appeal of Scofield, 149 N.H. 344, 346 (2003), holds that "when suit is allowed, the lien attaches." The carrier does not have to intervene to protect it.
It reaches benefits not yet paid. The lien "cannot be limited to payments made before the settlement of the third party action but must cover those to be made in the future." Bilodeau v. Oliver Stores, Inc., 116 N.H. 83, 87 (1976).
It reaches the uninsured motorist coverage you bought and paid premiums on. Rooney v. Fireman's Fund Insurance Co., 138 N.H. 637, 641 (1994). Most states go the other way; New Hampshire looked at those cases and said "We do not find such case law persuasive." 138 N.H. at 640.
Before the money can be disbursed
The statute puts several gates between a settlement and a disbursement, and they run in order.
The settlement has to be approved. RSA 281-A:13, III(a). It is not binding until the commissioner, the court, or the arbitrator approves it and makes provision for paying the lien. Scofield records the cost of skipping that: the petitioner "risked having Liberty Mutual satisfy its statutory lien through a payment holiday." 149 N.H. at 346.
The lien is measured by what the carrier paid. RSA 281-A:13, I(b) sets it "to the extent of the compensation, medical, hospital, or other remedial care already paid or agreed or awarded to be paid." Weekly indemnity checks, medical bills, and any lump sum are all in it. What the lien can attach to and what the lien is worth are two different questions, and this is the second one.
The same sentence of the statute takes two things back off. The lien reaches "the amount of damages or benefits recovered by the employee, less the expenses and costs of action," and it comes down again by "the employer's or the employer's insurance carrier's pro rata share of expenses and costs of action as determined in paragraph IV." RSA 281-A:13, I(b). The carrier's obligation to bear a proportional share of the cost of the recovery is in the statute itself.
Paragraph IV says who sets that share. "[T]he commissioner, the arbitrator, or the superior court, as the case may be, shall order such division of expenses and costs of action, including attorney's fees, between the employer or the employer's insurance carrier and the employee as justice may require." RSA 281-A:13, IV.
What "pro rata" looks like when a court does it. Gelinas declined to state a formula for the just share, 139 N.H. at 19, but the arithmetic in practice is proportional. In Langenfeld the carrier's lien of $367,344 was roughly 53% of the settlement's total present value, so the court held the carrier responsible for 53% of the claimant's legal fees and costs. 160 N.H. at 90. The carrier is repaid out of a fund somebody else paid to create, and the statute is how it can be made to pay its share of creating it. That share is not applied on its own. It is ordered.
The holiday, and what it costs on a real timeline
The workers' compensation lien is only the visible half. When a third-party recovery exceeds the lien, the carrier stops paying benefits until its future obligations equal the net recovery. Appeal of Langenfeld, 160 N.H. 85, 87 (2010), describes it: the carrier "was temporarily relieved of its liability for compensation payments from the date of the court's approval of the settlement until the sum of all payments due exceeded the net value of the settlement," a period "commonly referred to as the insurer's 'holiday' from liability."
Langenfeld was injured at 21 and left paraplegic. His third-party settlement netted $209,330.92 after the lien and its share of fees. The board later found the holiday exhausted on October 16, 2000, when his own qualifying medical expenses reached roughly $209,000. 160 N.H. at 87-88. His entire net recovery was consumed by his own medical bills in about six years, and during those six years the compensation carrier paid nothing.
The lever, and it turns on how the settlement is written
Scofield is the other side of the same statute. A settlement resolved two different claims for $20,000 and netted $15,000, and the agreement did not say how much belonged to which claim. The compensation appeals board cut the lien in half, to $7,500, and the Supreme Court affirmed: "We reject a per se rule that settlement proceeds not apportioned between claims in the settlement agreement should be allocated first to the claim on which the compensation carrier has a lien." 149 N.H. at 347.
How a settlement is papered changes what the lien takes, and there is no default rule favoring the carrier. Dimick marks the outer edge of it: an allocation made to frustrate a claim will not stand. Getting it right is judgment about the case rather than a form to fill in.
One claim a work injury does not produce is a hospital lien. RSA 448-A:1 gives a licensed hospital or home health care provider a lien on an injured patient's recovery, but only for an accident "not covered by the workers' compensation act." In a non-work crash, that lien is live.
Medical payments coverage is the one that runs the other way
Everything above is money leaving. Medical payments coverage is money that should come in, and a self-handling claimant often does not collect it, because nobody involved has a reason to mention it.
Most New Hampshire private passenger auto policies carry it. RSA 264:16, I requires at least $1,000 per person for reasonable medical costs arising from an accident involving the insured vehicle, covering the driver and the passengers, and it applies to medical costs incurred during the three years following the injury. It is first-party coverage on your own policy, so it does not depend on proving anyone at fault, and it is payable whether or not you ever settle with the other driver.
It is not a lien, and the reason is in the statute. RSA 264:17: "The right of subrogation against any third party shall not exist or be claimed in favor of the insurer who has paid or reimbursed, to or for the benefit of the insured, medical costs under coverage provided for pursuant to RSA 264:16." Your auto carrier pays those bills and does not get the money back out of your settlement.
Two New Hampshire decisions put teeth in that. In Murley v. Hanover Insurance Co., 155 N.H. 540 (2007), an insurer that had paid $5,000 in med-pay tried to keep back the same $5,000 from what it owed the insured on another coverage. The Court held it could not, because doing so "would, in effect, constitute subrogation" contrary to RSA 264:17. 155 N.H. at 544. It added the sentence a policyholder should keep: "Where a plaintiff pays a separate premium for each type of coverage, we see nothing unjust in allowing the plaintiff to recover under each endorsement." 155 N.H. at 545.
In Langevin, an auto carrier argued that paying medical payments benefits toward the claimant's health insurer's lien would be a prohibited duplicate payment. The Court disagreed, holding the trial court erred in so ruling. 170 N.H. at 670. Med-pay money can be used to satisfy a health plan's lien, and a carrier that calls that a duplication is wrong.
Two limits belong with that. The coverage is yours to direct: you have the "exclusive right to submit" a claim to med-pay, to health insurance, or to both, and a provider cannot take it by assignment. RSA 264:16, III, IV. But the coverage does not exist on every vehicle. RSA 264:16, V carves out commercial policies insuring more than four automobiles, along with garage, repair shop, service station, parking and trucking policies. If the vehicle you were in sat on one of those, neither the coverage requirement nor the no-subrogation rule applies to it.
The protection is aimed at the auto carrier and stops there. RSA 264:17 "is silent as to the subrogation rights of health insurers," Langevin, 170 N.H. at 669, and the health plan's lien in that case was enforceable.
What this means before you sign anything
What a claim is worth and what you keep are different questions, and the second one turns on who paid your bills rather than on how badly you were hurt. Four of the five payers can reach the settlement, one of them without anyone signing anything, and the fifth is money you may be able to collect and keep. The reductions that cut those claims down are real, they are discretionary in all three statutes that create them, and they happen before the money is disbursed or not at all.
If you are looking at an offer and cannot say who paid each of your medical bills, that is the question to answer first. Apis Law handles personal injury and workers' compensation matters throughout New Hampshire, from the office on Mast Road in Goffstown and in Manchester. Prior matters are described on the case results page, and Attorney Diaz's background is set out in full. You can speak directly with Keith about what is attached to your case.
The New Hampshire decisions described above are reported appellate cases involving other claimants. They are not results obtained by Apis Law. Past results do not guarantee future outcomes.
The New Hampshire statutes cited here can be read at Justia's New Hampshire code collection, and court information is at the New Hampshire Judicial Branch.
Frequently asked questions
Does my health insurance get paid back out of my New Hampshire settlement?
It depends on the policy. A health insurer in New Hampshire has no free-standing right to reimbursement and acquires one only by contract, as Langevin v. Travco Insurance Co., 170 N.H. 660, 669 (2018) puts it. Where a contractual claim exists, RSA 507:7-j lets the court divide the expenses and attorney's fees of producing the recovery between you, the carrier, and any medical provider asserting a claim.
Why is the workers' compensation carrier taking part of my settlement against the other driver?
RSA 281-A:13, I(b) gives the carrier a statutory lien on a third-party recovery to the extent of what it has paid. The lien attaches automatically once suit is allowed, Appeal of Scofield, 149 N.H. 344, 346 (2003), and it reaches future benefits and pain and suffering as well as medical bills and lost wages.
What is a workers' compensation holiday in New Hampshire?
After a third-party recovery, the compensation carrier stops paying benefits until its obligations equal the net recovery. Appeal of Langenfeld, 160 N.H. 85, 87 (2010) describes it as the insurer's "holiday" from liability. In that case a paraplegic claimant's entire $209,330.92 net was consumed by his own medical expenses within roughly six years, with no benefits paid during that period.
Do I have to pay back medical payments coverage in New Hampshire?
No. RSA 264:17 provides that a right of subrogation "shall not exist or be claimed in favor of the insurer who has paid or reimbursed" medical costs under RSA 264:16 coverage. Your auto carrier pays those bills and does not recover them from your settlement. The exception is coverage that falls outside RSA 264:16 altogether, such as a commercial fleet or trucking policy under RSA 264:16, V.
Can a court reduce a lien on my New Hampshire injury settlement?
Yes, and in all three settings the standard is discretionary. RSA 281-A:13, IV, RSA 507:7-j, and RSA 167:14-a, IV each direct the decision-maker to order the division "as justice may require." The Supreme Court declined to reduce that to a formula in Gelinas v. Sterling Industries Corp., 139 N.H. 14, 19 (1994). A reduction available on a discretionary standard is one that has to be requested.
About the Author
Keith F. Diaz, Esq. is the founder of Apis Law, PLLC, a New Hampshire personal injury and employment law firm. Attorney Diaz has been practicing in New Hampshire since 2003 and is admitted to practice in the State of New Hampshire (Bar No. 15831), the U.S. District Court for the District of New Hampshire, and the First Circuit Court of Appeals. He founded Apis Law in 2022 to provide dedicated, client-focused representation to individuals and families throughout New Hampshire.
Apis Law, PLLC
470 Mast Road
Goffstown, NH 03045
(603) 785-1013
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