Dane County committee weighs subrogation language in disability RFP

The Dane County Insurance Advisory Committee reviewed a set of minor edits to a pending disability-request-for-proposals and focused on whether subrogation language should be retained for workers' compensation cases.

Amy Utsig told the committee that county risk management had asked for subrogation language to be included in all RFPs as a protection because the county's health insurance cannot subrogate against workers' compensation. Nate, presenting carrier responses, said the disability carrier (Standard) marked subrogation "NA" for work-related disabilities because the STD policy excludes disabilities arising out of or in the course of employment. "Under the STD policy, disabilities arising out of or in the course of employment are excluded from STD coverage, so subrogation wouldn't apply since the STD benefits would not be payable for work related disabilities," Nate said. He added that for LTD, carrier practice treats workers' comp benefits as deductible income and offsets LTD benefits.

Committee members pressed for practical language to address situations in which a workers' compensation claim closes but the employee is still medically unable to return to work. One member noted recurring operational problems with employees who have exhausted workers' comp benefits but cannot resume their job and then face underwriting hurdles to shift to short- or long-term disability. The committee asked Nate to check with carrier partners about how such cases are adjudicated and whether the RFP should include a separate workers' comp subsection clarifying post-claim eligibility and subrogation expectations.

No final change was approved at the meeting; the item remains pending and staff were directed to return with recommended language after carrier follow-up.