Mea Culpa: The Right Way To Apply the New SEHP Legislation

A fellow plaintiff’s lawyer, David Lewis of KELLY & WEST ATTORNEYS in Lillington, NC, has correctly pointed out that the new SEHP legislation uses the language from the NC Medical Lien Statute and that the analysis should probably follow that line of lien reduction.(i.e. I got it wrong) He’s absolutely correct, I think. The final result comes out almost the same as my analysis, but I’m embarrassed to say that I knew we included the language of NCGS 44 -50 in the SEHP legislation, but forgot to use that same analysis. The good news is that SEHP is still WRONG.

David’s email correctly points out:

The calculation should be:
30,000 settlement
10,000 atty fees
250 costs
125,000 SEHP lien
FIRST: Subtract out atty fees and costs to determine “total damages recovered by the Plan member”(not total amount paid by 3rd party)
30,000
-10,000
-250
19,750 SUBJECT TO LIEN
SEHP not to exceed 50% of “total damages recovered by the Plan member”
THEREFORE: SEHP lien is $125,000 > $19,750
LIEN IS REDUCED TO 50% of $19,750 = $9,875.00
Final Disbursement:
30,000 Settlement
-10,000 Attorney Fees
-250 Costs
-9875.00 FINAL LIEN
$9,875.00 to CLIENT