Michigan Auto Accident Injuries: Understanding Health Insurance Coverage

In Michigan, health insurance covers auto accident injuries, but there are some important exceptions and limitations to be aware of. Generally, health insurance will pay out if the person has coordinated No-Fault auto insurance or when medical bills exceed a certain amount. However, some health plans exclude auto accidents and may not cover all necessary services that would be covered by No-Fault insurance.

No-Fault auto insurance

Under the No-Fault system, if a person is injured in a car accident, their auto insurance company pays for their medical bills and lost wages, regardless of who caused the accident. This is mandatory for anyone driving regularly in the state.

There are varying levels of No-Fault insurance protection that people can choose from, and some can even opt out of medical coverage altogether. The coverage levels are: Unlimited, $50,000 (for those enrolled in Medicaid), $250,000, and $500,000.

If a person has "coordinated" No-Fault coverage, their health insurance will be the primary payer, and No-Fault coverage will pay for any remaining costs. If a person has "uncoordinated" coverage, their auto insurance will pay first.

There are some important exceptions to this. If a person loses their job due to their injuries and their health insurance was provided by their employer, their coverage will be terminated. Also, some health insurance plans exclude auto accidents, and some services that are covered by No-Fault insurance are not covered by health insurance. These include:

• Attendant care by an agency
• In-home attendant care
• Rehabilitation services
• Door-to-door medical transportation
• Home purchases/modifications
• Vehicle purchases/modifications
• Long-term speech and cognitive therapy

Health insurance as the primary payer

Health insurance plays a significant role in covering auto accident injuries for crash victims in Michigan. The state's No-Fault law allows drivers to "coordinate" their health insurance and No-Fault coverage so that health insurance becomes the primary payer in the event of a car accident. This coordination is beneficial when medical bills exceed the No-Fault PIP medical benefits coverage level.

When a driver coordinates their No-Fault auto insurance with their health insurance, the health insurance becomes the "primary" payer. It will be responsible for covering the driver's crash-related medical care and treatment, with No-Fault acting as the "secondary payer" if health insurance coverage is exhausted or does not cover certain treatments.

There is an exception to this coordination: if a driver's health insurance is a self-funded ERISA plan provided by their employer, with an unambiguous coordination of benefits clause stating it will not be the "primary" payer for crash-related expenses, then coordination with No-Fault is not allowed.

The extent of health insurance coverage for car accident injuries depends on the No-Fault PIP medical benefits coverage level chosen. Drivers in Michigan can select from the following options:

• Unlimited
• $250,000
• $500,000
• $50,000 for drivers enrolled in Medicaid

If a driver's medical bills exceed the $250,000 or $500,000 coverage levels, they may need to rely on their health insurance plan to cover the excess. However, if the No-Fault coverage is unlimited or the driver is on Medicaid, health insurance is unlikely to play a role.

It is important to note that some health insurance plans exclude auto accidents and may not cover all necessary services provided by No-Fault. Additionally, health insurance plans may have "auto accident exclusions," refusing to pay for treatment related to motor vehicle crashes. As a result, it is crucial for drivers to carefully review their health insurance plans and understand the potential limitations of coverage in the event of a car accident.

Excess medical bills

The No-Fault PIP medical benefits coverage levels that drivers in Michigan must choose from when purchasing auto insurance include:

• $50,000 for drivers on Medicaid
• $250,000
• $500,000
• Unlimited

If a driver's medical bills exceed either the $250,000 or $500,000 coverage levels, they can turn to their health insurance plan to cover the excess. However, it's unlikely that health insurance would cover excess medical bills if the No-Fault PIP medical benefits coverage levels are unlimited or $50,000 for Medicaid recipients.

In the case of Medicaid, it is expected that once a driver's car accident-related medical bills exceed $50,000, and No-Fault coverage ceases, then Medicaid will pay for accident-related medical care thereafter. For the $250,000 and $500,000 coverage levels, it is expected that once the driver's medical bills exceed the selected coverage level, Medicaid will cover the excess.

It's important to note that health insurance plans may have "auto accident exclusions," which specifically exclude coverage for injuries caused by motor vehicle crashes. As a result, drivers and crash victims must carefully review their health insurance plans to understand what is covered and what exclusions may apply in the event of an auto accident.

Auto accident exclusions

It is important to note that auto accident exclusions do not apply if a person has "coordinated" their No-Fault coverage and health insurance coverage. In this case, health insurance will be considered the "primary" payer, and No-Fault insurance will pay only after the health insurance coverage has been exhausted.

To summarize, auto accident exclusions can significantly impact a person's ability to receive medical coverage for injuries sustained in a car accident. It is crucial for drivers and crash victims to carefully review their health insurance plans and be aware of any auto accident exclusions that may apply.

ERISA liens

Understand the Law Governing ERISA Plans:

This area of law is complex, and it's crucial to understand the relevant case law. While federal law governing ERISA plans usually preempts state law, there is an exception under the "saving clause" if the plan is insured. In that case, state laws regulating insurance may apply.

Explain the Complexity to the Client:

Be transparent with your client about the challenges of negotiating ERISA liens. Emphasize that success depends on the plan's language and whether it is insured or self-funded.

Read the Contract:

Obtain and carefully review the contract language. Confirm that the contract is indeed governed by ERISA and determine the type of plan (self-funded or insured). Understand the plan's reimbursement rights, the sources it can recover from, and whether it waives any equitable defenses.

Narrow the Claim:

Ensure the plan has a valid right to reimbursement and identify the settlement funds it can access. Most plans can only recover from third-party settlements, not from uninsured or underinsured motorist cases.

Reduce Unrelated and Unreasonable Charges:

Review the itemized charges for any unrelated or duplicate billing and have these removed. Also, assess the reasonableness of the charges, especially in comparison to similar services in the same geographical area.

Credit for Co-pays and Unrecovered Medical Bills:

Ensure your client receives credit for any co-pays made. Additionally, argue for a reduction if certain medical bills are not part of the settlement offer or if the policy limits are insufficient to cover all damages.

Determine Applicable Law and Available Equitable Defenses:

If the plan is insured, argue that state laws regulating insurance, such as those reducing liens based on comparative fault, should apply. For self-funded plans, federal ERISA law applies, but equitable defenses may still be available if the plan language is silent on them.

Apply Equitable Defenses:

Use equitable arguments to reduce the lien claim, such as the made whole doctrine, which limits subrogation until the insured is fully compensated. If the plan is silent on equitable defenses, they may be available, as seen in US Airways v. McCutchen.

Know Your Limitations:

This area of law is intricate, and mishandling an ERISA lien can have severe consequences for your client. Recognize when to bring in a specialist with expertise in this field.

Common Sense and Courtesy:

While legal strategies are essential, don't underestimate the power of building rapport with the lien claimant and appealing to their common sense. Emphasize that receiving some payment now is better than risking getting nothing later.

Frequently asked questions