Can veterans opt-out of PIP no-fault coverage in Michigan?
Beginning on July 1, 2020, Michigan drivers for the first time were able to purchase different options in PIP (personal injury protection) coverage. For the past 45 years, all Michigan no-fault policies contained unlimited PIP benefits. This coverage gave drivers and their passengers unlimited access to medical benefits, 3 years of lost wages, unlimited reimbursement for out-of-pocket expenses and other benefits.
But with the ever-increasing cost of auto insurance, state leaders passed a law in 2019 giving Michigan motorists and policyholders the ability to purchase limited PIP. This past July, the new law allowed motorists to purchase policies with unlimited PIP coverage, $500,000 in coverage or $250,000 in PIP coverage. Most motorists in Michigan must purchase one of these coverage limits.
However, some individuals can completely opt-out of purchasing any medical PIP coverage, so long as they are eligible. These individuals include Medicare beneficiaries who meet certain criteria (enrolled in both Medicare Parts A and B). They also include individuals who have qualified health coverage (QHC).
QHC is health or accident coverage that does not exclude or limit coverage for injuries related to motor vehicle accidents. If an individual has QHC, then he or she may be eligible to completely opt-out of purchasing PIP coverage.
Since the passage of the new Michigan no-fault law, there has been debate as to whether veterans covered through the VA (Department of Veterans Affairs) as their primary health care provider are considered to have QHC for purposes of no-fault coverage. Thousands of Michigan veterans receive their health care through the VA. Most of these veterans are also car owners who purchase Michigan insurance policies throughout the state.
On September 2, 2020, the Department of Insurance and Finance (DIFS) issued Bulletin 2020-37-INS. The Bulletin states veterans and their dependents enrolled in VA benefits do not qualify as QHC because it excludes or limits coverage for injuries related to a motor vehicle accident.
The Bulletin goes on to say that VA is not health insurance but rather a health care provider. As such, VA has “limited authority to reimburse veterans for emergency care in a non-VA facility, even when veterans who are injured in a motor vehicle accident need emergency care in such a facility.” Because the VA cannot meet the requirements of QHC as defined in the Michigan no-fault law, veterans enrolled in the VA cannot opt-out of PIP no-fault coverage.
The Bulletin finishes by strongly encouraging veterans to discuss their auto insurance needs with their agents, the insurance company, or a financial advisor when purchasing auto insurance.
I believe DIFS made the right decision in issuing this bulletin. First, it provides additional clarity so individuals and insurance agents can better understand who is and who is not eligible for certain auto insurance policies.
Second, it makes the correct ruling because in reality VA benefits are not the same as health insurance. The VA does not provide health insurance outside of VA facilities. In addition, the VA has certain requirements – such as pre-authorization of certain medical treatment – that limits coverage for injuries related to a car accident. Because of this limitation, the VA fails to meet the threshold of Qualified Health Coverage as outlined in the Michigan no-fault law.
If you are veteran and you have been injured in a car or truck crash anywhere in Michigan, please give us a call. Our dedicated and experienced Michigan car accident lawyers are standing by, ready to answer any questions you may have.
The call is free and we don’t charge a penny unless we win your case and obtain compensation from the insurance company. Call us at 1-800-LEE-FREE (1-800-533-3733).