Assigned to FICO FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
FACT SHEET FOR S.B. 1498
insurance; lienholder; third-party liability
Purpose
Specifies that the amount actually collectable from a third-party liability claim is the
payment for past and future medical expenses and lost wages, including attorney fees.
Background
If an employee who is entitled to worker's compensation is injured, killed or further
aggravated from a previously accepted industrial injury by the negligence of another person not in
the same employ, the injured employee, or in event of death the injured employee’s dependents,
may pursue a remedy against the other person. The employee or employee's dependents must
provide the insurance carrier or self-insured employer written notice of the intention to bring an
action against a third party as well as a timely and periodic notice of all pleadings and rulings
concerning the pending action status. In any action instituted by the employee or employee's
dependents, the insurance carrier or self-insured employer has the right to intervene at any time to
protect their interests.
Should the employee proceed against the other person, compensation and medical, surgical
and hospital benefits must be paid as specified. The insurance carrier or other person liable to pay
the claim must have a lien on the amount actually collectable from the other person to the extent
of such compensation and medical, surgical and hospital benefits paid. The lien is not subject to a
collection fee. The amount actually collectable is the total recovery minus the reasonable and
necessary expenses, including attorney fees, actually expended in securing the recovery.
Compromise of any claim by the employee or employee's dependents at an amount less
than the compensation and medical, surgical and hospital benefits provided must be made only
with written approval of the insurance carrier or self-insured employer liable to pay the claim
(A.R.S. § 23-1023).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Defines amount actually collectable as the total recovery minus the reasonable and necessary
expenses, including attorney fees actually expended in securing the recovery.
2. Defines total recovery as the portion of the settlement, judgement or award that represents
payment to the employee for past and future medical expenses and past and future lost wages.
3. Makes technical and conforming changes.
4. Becomes effective on the general effective date.
Prepared by Senate Research
February 8, 2024
MG/AB/cs