CIVIL/DAMAGES: Creates CARE Accounts for certain damages arising from delictual actions
Summary
HB 1089 creates a new legal mechanism called a CARE Account, or Compensation Allocated for Reimbursable Expenses Account, for certain civil damage awards in delictual actions. When a court awards special damages for future medical expenses, the bill generally requires that portion of the award to be deposited into a money market account established by the payor for the plaintiff’s benefit, unless the parties agree otherwise and the court approves. The account is intended to be used only for qualifying medical expenses related to the injury or condition that was the subject of the judgment, and the plaintiff must sign an affidavit acknowledging that limitation before funds are deposited.
The bill also sets out how the account is administered and closed. Financial institutions may issue a transaction card for the plaintiff, but they are not responsible for policing whether transactions are actually for qualifying medical expenses. A payor may use a third-party administrator to monitor or reconcile transactions, and the account is to remain available for the plaintiff’s lifetime. After the plaintiff’s death, the account must be closed 180 days after notice, and any remaining funds revert to the payor in proportion to each payor’s contribution.
Impact
HB 1089 would add new provisions to Title 6 of the Louisiana Revised Statutes by enacting R.S. 6:1431 through 1434. It changes how future medical expense awards are handled in covered civil injury cases by directing those funds into a restricted account rather than paying them out directly, and it creates duties for courts, insurers, plaintiffs, and financial institutions. The bill excludes several categories of cases, including intentional torts, medical malpractice, sexual assault and sexual battery claims, cases already subject to Medicare Set Aside requirements, certain claims involving the Future Medical Care Fund, and cases with no liable payor. It applies prospectively only to causes of action filed on or after January 1, 2027.
Sentiment
The bill appears to have received meaningful support in the House, passing final passage by a vote of 64 yeas to 27 nays. The available record does not include committee testimony or debate, so the broader discussion is reflected mainly in the bill’s structure and amendments rather than direct statements from legislators. Overall, the measure seems to have been viewed as a procedural reform for managing future medical damages, but not without opposition.
Contention
The main points of contention likely concern whether the CARE Account model protects injured plaintiffs or unnecessarily restricts access to damages awarded for future medical care. Critics may object to the requirement that funds be limited to qualifying medical expenses, the payor’s continued ownership of the account, and the reversion of unused funds to the insurer after the plaintiff’s death. Supporters likely view the bill as a way to ensure medical-damage awards are used for their intended purpose and to create a structured alternative to other set-aside arrangements. The exclusions for intentional torts, malpractice, sexual assault, and Medicare-related cases also suggest the bill was narrowed to avoid overlap with existing remedies and federal programs.
Provides for recoverable medical expenses, limitation upon jury trials and admissibility of evidence in civil actions. (8/1/25) (OR INCREASE LF EX See Note)
Excludes certain amounts deposited into ABLE accounts for qualified expenses of persons with disabilities from state income tax. (8/1/25) (OR DECREASE GF RV See Note)
Excludes certain amounts deposited into ABLE accounts for qualified expenses of persons with disabilities from state income tax. (8/1/25) (EN DECREASE GF RV See Note)