In a third-party recovery scenario, the employer has the first right if the lien does not exceed the recovery amount.

In a third-party recovery scenario, the employer has the first right if the lien does not exceed the recovery amount.

• A. The employer, if the lien does not exceed the amount of the recovery
• B. The employee, if the lien does not exceed the amount of the recovery
• C. Shared equally between employee and employer
• D. The insurer

Answer: (A)

In a third‑party recovery, the employer can recover the benefits it paid to the employee by placing a lien on any settlement or judgment obtained from the third party. The important point is the order of payment from that recovery: the employer’s lien is satisfied first, up to the amount of the lien. If the third‑party recovery is large enough to cover the lien, the employer gets paid in full from that recovery, and any remaining funds go to the employee. That’s why the statement about the employer having the first right when the lien does not exceed the recovery amount is correct. The employee does not have priority over the lien, and the insurer does not independently trump the employer’s lien when valid subrogation is involved; the lien amount determines how much of the recovery the employer can claim first.

In a third‑party recovery, the employer can recover the benefits it paid to the employee by placing a lien on any settlement or judgment obtained from the third party. The important point is the order of payment from that recovery: the employer’s lien is satisfied first, up to the amount of the lien. If the third‑party recovery is large enough to cover the lien, the employer gets paid in full from that recovery, and any remaining funds go to the employee. That’s why the statement about the employer having the first right when the lien does not exceed the recovery amount is correct. The employee does not have priority over the lien, and the insurer does not independently trump the employer’s lien when valid subrogation is involved; the lien amount determines how much of the recovery the employer can claim first.