Defendants Can Now Use CPLR 4545 And The Affordable Care Act To Attack Future Medical Expense Awards Where Plaintiff Does Not Have Insurance Coverage, But Plaintiff Qualifies For Such Coverage Under The Affordable Care Act

Written by C. Briggs Johnson

In Liciaga v. New York City Tr. Auth., 2024 NY Slip Op 04257 (2d Dep’t Aug. 21, 2024), the Appellate Division, Second Department recently issued a groundbreaking and long overdue decision allowing defendants in personal injury actions to attack a plaintiff’s award of future medical expenses under the Patient Protection and Affordable Care Act (“ACA”).  The essential take away from the holding is that a defendant can seek a collateral source hearing under CPLR 4545, even if a plaintiff does not have insurance coverage if the plaintiff qualifies for medical insurance coverage under the Affordable Care Act.  The plaintiff cannot simply decide not to obtain coverage under the ACA, because of plaintiff’s duty to mitigate his or her damages.

As the Court noted, this applies to most Americans.  “Pursuant to the ACA, most Americans must obtain ‘minimum essential [health insurance] coverage.”  And, “plaintiffs are also required to mitigate their damages and thus ‘make reasonable exertions to render the[ir] injur[ies] as light as possible.”  Thus, the Court continued, “[t]o the extent that a plaintiff can mitigate his or her damages by procuring insurance coverage that would offset some portion of his or her future medical expenses, he or she cannot simply decline to do so without a plausible explanation and avoid potential consequences.”

For example, if a plaintiff is awarded $1,000,000 in future medical expenses, plaintiff is uninsured, and a defendant can prove that the plaintiff is qualified for insurance coverage under the ACA, and that that insurance coverage would have paid $200,000 dollars towards plaintiff’s future medical damages, a defendant is entitled to a $200,000 reduction in those future medical damages under CPLR 4545.  We anticipate that this decision will have broad implications for the entire defense bar, and it will add another crucial tool in mitigating a plaintiff’s damages.

Please feel free to reach out either Howard Klar or C. Briggs Johnson regarding any questions you may have regarding this decision and how it impacts our clients, and on how we may be of assistance in helping to brief any post-trial motions on this issue.