Monday, June 25, 2018

Subrogation – Third Party Recovery

The State Health Plan has the right of subrogation upon its injured members' right to recover from liable third parties. The Plan's objective is to recover medical expenditures incurred by the Plan where a third party is liable for the care.

Please note that in accordance with North Carolina General Statute (N.C.G.S.) § 135-48.37, the Plan is required to inquire about the terms of any third party recovery and disbursement to all lien holders if payment to the Plan is less than 100 percent of its lien. The Plan collects 50 percent of the total damages recovered by members after reasonable costs of collection have been subtracted from the total recovery.

Members should contact Health Management Systems Inc. (HMS), which has been contracted by the Plan to perform subrogation services, at 800-294-2757 to determine whether the Plan is claiming a right to recovery. Members or their duly authorized representatives can also email subrogation requests to

Retirement/Disability Offset

North Carolina law, as amended by Session Law 2017-135, provides that the monthly benefits to a member participating in a State-administered retirement system, the former Disability Salary Continuation Plan, or the Disability Income Plan of North Carolina may be offset to recoup an overpayment of State Health Plan funds, including benefits paid to, or State Health Plan premiums or claims paid on behalf of, any member or beneficiary. 

The amount of the offset from a member’s retirement or disability benefits will vary depending on the amount of the debt.  If the entire outstanding amount cannot be deducted from one month’s benefit, a smaller amount will be deducted each month until the entire outstanding amount is repaid.  If you have any questions about this process or the status of a debt or would like to repay any amounts owed, please contact Customer Service at 919-814-4400.

Department of Revenue Debt Setoff

Pursuant to N.C.G.S. §§ 105A-3 and 18C-134, the State Health Plan (Plan) is obligated to submit all outstanding member debts to the North Carolina Department of Revenue (NCDOR) for collection.  When a debtor files their tax return to claim their refund with NCDOR, the refund is captured and sent to the Plan.

Depending on the situation, NCDOR may be able to capture sufficient funds to satisfy the entire debt or only a portion – this depends on the total amount of debt owed to the Plan and other agencies and/or the amount of refund the debtor has with NCDOR.  In addition to tax refunds, NCDOR will also capture lottery prize payments to satisfy debts owed to the Plan.  NCDOR debt setoff will occur in addition to any other collection activities being pursued by the Plan.