HB497 Alabama 2023 Session

Summary

Primary Sponsor

Mike KirklandRepresentative

Republican

Session

Regular Session 2023

Title

Relating to workers' compensation; to amend Section 25-5-11, Code of Alabama 1975, to further provide for the employer's right of subrogation against uninsured and underinsured motorist insurance; and to specify that in a settlement of claims against a third party, the employer's share of the employee's attorney fees does not include costs or expenses.

Summary

HB497 would allow employers to seek subrogation from uninsured/underinsured motorist insurance for workers' compensation payments and adjust how attorney fees are handled in third-party settlements.

What This Bill Does

The bill lets employers recover workers' compensation costs from the employer‑provided UM/UIM coverage in work-related vehicle accidents. It states that damages recovered by the employee or dependents from the other party or from UM/UIM are credited against the employer's workers' compensation liability, and if the recovery exceeds the compensation due, the employer has no further liability. It also requires that, in third-party settlements, the portion of the employee's attorney fees charged to the employer excludes costs and expenses, and it clarifies subrogation for medical and vocational benefits; it describes how reimbursement works and under what circumstances benefits may be suspended. The act also includes provisions for willful misconduct cases and provides an extension of time for civil action if the employee or dependents do not file within the usual period.

Who It Affects

• Employers who purchase uninsured/underinsured motorist insurance and provide workers' compensation coverage, as their recoveries and subrogation rights are expanded.
• Employees and their dependents who are injured or killed in work-related vehicle accidents, including how damages, settlements, and attorney fees affect their recovery and employer reimbursements.

Key Provisions

• Amends Section 25-5-11 to allow the employer to seek subrogation against uninsured/underinsured motorist insurance for workers' compensation obligations in work-related vehicle accidents.
• Damages recovered from third parties or UM/UIM are credited against the employer's workers' compensation liability; if the damages exceed compensation, the employer is not further liable.
• Employer is entitled to reimbursement for compensation paid from damages recovered, and if the employee has permanent total disability, the employer's obligation may be suspended for a calculated period.
• Employer has subrogation rights for medical and vocational benefits expended on behalf of the employee; recovery is proportionate if a judgment is uncollectible.
• In settlements with a third party, the employer is responsible only for the portion of attorney fees (excluding costs and expenses) in the same proportion as the reduction in the employer's liability; costs and expenses are excluded from the employer's share.
• If willful conduct by certain parties leads to injury or death, the employee or dependents may have a separate cause of action against those parties.
• If the employee or dependents do not file a civil action within the usual time, an additional six months is allowed for the civil action to proceed.
• For subrogation purposes, compensation includes medical expenses if the employer is entitled to subrogation for those expenses.
• Effective date: the act becomes law on the first day of the third month after passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Worker's Compensation, specifying the employer's right to subrogation