## Facts

- Maria Perreira slipped and fell on snowy and icy premises owned by Columbia Savings Bank, allegedly due to negligent snow and ice removal.
- Perreira sued the premises owner, the snow-removal contractor, and their liability insurers.
- Perreira’s health insurer, Oxford Health Plans, paid about $13,000 in medical expenses and asserted a right to recover those payments from tort defendants or their insurers.
- In a separate matter, Takako Beninato was injured during a dog-grooming session involving a dog owned by Leonard and Lenore Achor.
- Oxford paid $7,357 for Beninato’s medical expenses.
- Beninato sued the Achors; while that action was pending, the Achors and their homeowner’s liability insurer filed a declaratory action seeking a ruling that Oxford was barred from subrogation or reimbursement by N.J.S.A. 2A:15-97.
- The negligence action settled for $95,000 with a release stating medical bills and expenses were not included in the settlement amount.
- Oxford claimed it could recover via contractual reimbursement if medical expenses were included in the settlement, or via subrogation against tortfeasors if they were not.

## Issues

1. Whether N.J.S.A. 2A:15-97 permits a health insurer that paid an insured’s medical expenses to recoup those payments through subrogation or contractual reimbursement after the insured obtains a tort recovery.
2. Whether private insurance contract provisions for reimbursement or subrogation are enforceable when they conflict with the cost allocation created by N.J.S.A. 2A:15-97.

## Decision

- The Supreme Court of New Jersey held that N.J.S.A. 2A:15-97 bars a health insurer from recovering medical payments by subrogation or contractual reimbursement when the insured recovers from a tortfeasor.
- The Court reasoned that the statute both eliminates plaintiffs’ double recovery and allocates the resulting benefit to liability carriers; allowing health-insurer recoupment would defeat that allocation.
- The Court rejected the argument that contractual reimbursement/subrogation clauses could be enforced notwithstanding the statute.
- The Court affirmed rulings denying Oxford recovery and reversed rulings to the extent they recognized or preserved Oxford’s subrogation or reimbursement rights.

## Legal Principles

- Under N.J.S.A. 2A:15-97, collateral source benefits such as health insurance payments reduce the tort award, preventing plaintiff double recovery and reducing the liability paid by tort defendants or their insurers.
- A health insurer may not recoup medical payments from an insured’s tort judgment or settlement through subrogation or contractual reimbursement when N.J.S.A. 2A:15-97 applies.
- Contractual reimbursement or subrogation provisions are unenforceable to the extent they conflict with the statutory scheme’s allocation of the benefit of the collateral source reduction to liability carriers.

## Conclusion

The Court interpreted N.J.S.A. 2A:15-97 to preclude health insurers from shifting the cost of paid medical benefits back onto an insured’s tort recovery through either subrogation or contractual reimbursement, because such recoupment would undo the Legislature’s allocation of the collateral source reduction to liability carriers.


Perreira v. Rediger, 778 A.2d 429 (N.J. 2001)