Why does OHIP receive part of my settlement?

Money with doctor symbol superimposed to show OHIP entitlement

Following settlement of your injury claim, there may be other parties entitled to part of your settlement: your Group Benefits Insurer/Extended Health Insurer, Ontario Disability Support Program, and the Ontario Health Insurance Plan (OHIP) to name a few.

 

What is Subrogated Interest?

In certain circumstances, OHIP will step in to cover certain health services like diagnostic testing and air ambulance fees. When these costs are made necessary by someone else’s wrongdoing, OHIP has a right to pursue compensation; this is known as a subrogated interest.

Subrogation is a legal term which describes the right to pursue recovery from the responsible party on behalf of someone else.

For example, let’s say that Mr. X had the bad luck of being the victim of a botched surgery. Mr. X seeks out medical services, which OHIP provides, and then sues Dr. Y for the damage caused by that initial surgery. OHIP would use their resources to help Mr. X recover and have a reasonable expectation of reimbursement. Since Dr. Y was ultimately responsible for that botched surgery, OHIP can also make a claim for their expenses against the doctor.

This claim on behalf of the injured party is called subrogation; because they have indemnified the injured person, OHIP has a subrogated interest as a result.

 

Limits to OHIP Entitlement

OHIP’s right of subrogation is limited by the Insurance Act and the Health Insurance Act, which state that OHIP cannot advance a subrogated claim against a person insured under an Ontario motor vehicle liability policy in respect of injuries arising from the operation of an automobile.

In other words, OHIP is entitled to claim from the proceeds of an injury settlement/award with the exception of motor vehicle accident related injuries and cannot recover against parties insured under an Ontario auto insurance policy.

This exception is due to an annual levy paid by Ontario auto insurers to OHIP to address car accident-related injuries.

However, while OHIP’s subrogated interest applies only to non-motor vehicle accident injury claims, it is important to be aware of it. Some OHIP subrogation claims are modest, but others can be in the hundreds of thousands of dollars or more.

 

The OHIP Subrogation Unit

OHIP essentially “piggybacks” on a claimant’s lawsuit. If the lawsuit is unsuccessful, neither the claimant or OHIP would recover anything. Therefore, OHIP may be prepared to accept less than its actual costs, considering the risks of litigation such as liability issues or difficulties relating to proving damages.

OHIP maintains a Subrogation Unit, which is responsible for collecting on all of its subrogation claims. Once OHIP is put on notice of a lawsuit, its Subrogation Unit will send out periodic breakdowns of the amounts it has paid out to date.

 

Next time you or a loved one settles an injury claim, don’t be surprised if OHIP expects to be reimbursed for a portion of the settlement. After all, if the Ontario government incurs costs towards your medical treatment following a personal injury, it would only seem fair that the money paid out by the negligent party would include such costs to repay the province. As it turns out, our healthcare system is not entirely free.

Lawson Hennick
Written by

Lawson is the creator of LawBubble.com, an online blog exploring legal issues, trends, and developments.

He received his Bachelor of Science degree in Biology from York University, and then attended University of Ottawa’s Faculty of Law graduating with a Bachelor of Laws degree in 2009 before being called to the Ontario Bar in 2010.

Lawson articled with a boutique litigation firm where he gained experience in a variety of practice areas including representing Indian Residential School survivors to obtain compensation through the Independent Assessment Process for sexual and physical harms suffered.

Since his call to the bar, Lawson has devoted his legal practice exclusively to the area of personal injury law before joining Yermus & Associates where he regularly acts for clients on injury claims including motor vehicle accidents, slip and falls, product liability and dog bite cases. He regularly appears before the Superior Court of Justice and has also appeared before the Financial Services Commission of Ontario (FSCO).