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Under Bad Press Walmart Drops Claim Against Disabled Former Employee

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Debbie Shank was an employee of Wal-Mart who was in a trucking accident and  sustained horrific permanent brain injury including most of her ability to even communicate and walk.  Her medical bills were paid for by her health insurance with her employer, Wal-Mart.  Of course, she worked for the right to have these health benefits.  After the accident  she and her family sued and recovered around $417,000 (after fees and expenses). The net settlement funds were put into a trust to help pay for her future medical care. 

Sadly, after Wal-Mart got wind of the settlement, instead of offering to help more because the net proceeds were far from sufficient to cover her future care needs, Wal-Mart’s health benefit plan  chose to sue Mrs. Shank to take the settlement proceeds from her.  Walmart won the suit because the language in its health benefit plan says that it can take everything from a settlement up to the full amount of the settlement.  So it did. The Shank’s appealed. They lost. Apparently, Wal-Mart did not care that this family lost everything, even a son who died in the Iraq war, and that Ms. Shank would have nothing to help her in the future.

 Then finally the word got out about what Wal-Mart was doing to this family. The story appeared all over the internet, in the mainstream news and elsewhere.  Most people were astounded that large companies can take away all of the settlement proceeds from an auto accident or other injury.  Most people do not know that these employers can do this even though the employee worked hard to earn the health benefits.  It was not welfare.

According to an interview with Jim Shank, after all the bad publicity, Wal-Mart decided to do the right thing.  Wal-Mart claims it will not take all the recovery from Ms. Shank and will amend its benefit plan to “allow us more discretion for individual cases”.  Hopefully Wal-Mart and other will recognize that it is not fair to treat employees this way. After all, the employee worked for the health benefits, it was not given for free. Further the employee is the person hurt, the employee has to hire the lawyer, do all the work to win in court, take all the risk including financial liability if they lose in court, and so it is not fair that the employer can sit back and just take all the money dollar for dollar once the employee wins the case.  For years and years the fair way for health insurers to operate and a way  that many State Laws require (but not employment health plans which are immune from State law) is that the health insurer can get paid back a fair percentage. By example, if the injury is worth one million dollars but the net recovery is only 10% of that then the health plan should only get paid back 10% of its medical bills.  That is more fair and hopefully what Wal-Mart will make as its policy.