Florida Collateral Source Rule: Quick Facts

Mar 03, 2021

collateral source rule florida
Personal injury damages are rarely as straightforward as one liable defendant paying one wronged plaintiff. Incidents that require legal action often have a number of parties involved, including private insurance companies as well as the individuals involved in the accident.

Unfortunately, this can complicate the process of compensating victims, especially when it comes to health care costs. To help ensure that plaintiffs don’t suffer as a result of this, Florida courts apply what is known as the collateral source rule.

Here’s how Florida’s collateral source rule works and how the personal injury team at Emmanuel Sheppard & Condon can help you recover a full and fair amount in compensation after an accident.

What Is the Collateral Source Rule?

The collateral source rule is intended to hold at-fault parties accountable for negligent or wrongful actions. Put simply, Florida law does not allow liable parties to pay less in damages just because a third party has already compensated the injured party. The rule is most commonly applied when a plaintiff uses their own insurance or benefits for medical treatment after the accident.

The collateral source rule states that a defendant is responsible for the full amount of calculated damages, even if the plaintiff’s insurance policy originally covered some of those losses. The idea behind this rule is to not punish plaintiffs for using their own resources to aid recovery. Courts will not admit evidence of these resources to reduce the plaintiff’s monetary compensation.

What Are Collateral Sources?

Collateral sources are, put simply, third parties that make payments to an injured person. In most personal injury cases, the collateral source refers to a plaintiff’s health insurance policy. The most common collateral sources are:

  • Private health insurance,
  • Auto insurance that provides health or income disability coverage,
  • Social Security, and
  • Employee salary continuation plans.

If the plaintiff is reimbursed by his or her own insurance or other above source, the amount cannot be deducted from a defendant’s monetary liability.

Exceptions to the Collateral Source Rule in Florida

For years, free or low-cost benefits like Medicare and Medicaid weren’t eligible for the collateral source rule. The rationale behind this exception was that these government benefits are programs that are of little (or no) cost to the plaintiff.

Thus, a defendant could submit evidence of Medicare and Medicaid payments to reduce a plaintiff’s awarded damages. However, a recent Florida Supreme Court decision has complicated the state’s approach to this rule. And the result is not favorable to defendants.

In a personal injury suit where the plaintiff wanted to exclude his Medicare benefits, the court determined that evidence could indeed be excluded. They held that a plaintiff’s future potential Medicare (and Medicaid) benefits could be excluded at trial. They reasoned that, “It is absolutely speculative to attempt to calculate damage awards based on benefits that a plaintiff has not received and may never receive . . .”

The court decided that because Medicare/Medicaid benefits are based on public funding and congressional action, these benefits are not guaranteed. Therefore, they cannot be deducted from the plaintiff’s damages award.

This is great news for potential plaintiffs but not for defendants. Under current Florida law, defendants are incredibly limited in ways to offset damages. Most evidence that formerly allowed a defendant to reduce damages awarded to a plaintiff is no longer available.

How Can the Attorneys at Emmanuel Sheppard & Condon Help?

Dealing with the aftermath of an accident caused by someone else’s negligent or wrongful action is tough enough. But worrying about who will pay for your current or future medical treatments is even rougher. You want to make sure that you will receive all the compensation you are legally entitled to, even if you have to use your own insurance or other benefit plan to seek treatment in the short term.

At Emmanuel Sheppard & Condon, we know how stressful these situations are for Floridians and their families, and we are here to help. Our experienced team of personal injury attorneys will work hard to recover the most compensation that you are entitled to by law.

We will always pursue full and fair compensation for your losses, whether or not you received compensation from a third-party collateral source. We’ve proudly served Floridians for decades and represent clients throughout all areas of Pensacola. Contact us by calling 850-444-4878, or fill out our online contact form to schedule a free case evaluation today!