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Military Veteran Awarded Benefits In Michigan Auto Accident No-Fault Case

Steinberg insurance coverage

The Michigan Court of Appeals awarded a military veteran Michigan no-fault benefits following a car accident that occurred in Wayne County.

In Bates v. Titan Insurance Company, a military veteran was injured while riding a motor scooter when a car ran a stop sign and collided with him. The plaintiff received medical treatment through the Veteran Administration (VA) for his injuries, including non-VA medical facilities. The plaintiff filed a claim for no-fault PIP benefits through the Michigan assigned claims plan, which assigned the claim to defendant Titan Insurance.

Defendant Titan Insurance refused to pay and of the requested no-fault benefits, arguing that because the plaintiff was entitled to health care benefits through the VA, the VA was the primary insurer responsible for plaintiff’s car accident related medical bills.

The Michigan Court of Appeals upheld the trial court’s ruling which held that defendant Titan Insurance was indeed primary for the payment of no-fault benefits and that the VA was not responsible. The Court in this case made a number of determinations.

First, the Titan Insurance argued that under the coordination of benefits language of MCL 500.3109a, it was not responsible for the medical bills incurred by the plaintiff inside or outside the VA system. Under Michigan law, if you purchase a coordinated Michigan no-fault policy, the auto carrier is typically secondary to applicable health insurance coverage (like Blue Cross or HAP) for the payment of auto related medical expenses. However, the Court in this case held that because he went through the Michigan assigned claims plan for no-fault benefits, the plaintiff never purchased a coordinated no-fault policy.

Second, Titan Insurance argued that under the no-fault law, specifically MCL 500.3172(2), benefits through the assigned claims plan are automatically coordinated with a claimant’s benefits received through other sources, such as VA benefits. The Court of Appeals disagreed, holding under federal law – specifically 38 USC 1729 – the VA is not a health insurer and the federal government has the right to be reimbursed for the cost of medical treatment provided to vets for non-service related injuries, like a car accident. Because federal law trumps state law, to the extent any provision within the Michigan no-fault law is in conflict with a federal statute mandating reimbursement for medical care and services provided to a veteran for car accidents, such state laws are preempted.

Last, the defendant argued that under MCL 500.3109(1), it was entitled to a set-off against federal benefits the plaintiff was entitled to, including VA health care benefits. MCL 500.3109(1) states:

“Benefits provided or required to be provided under the laws of any state or the federal government shall be subtracted from the personal protection insurance benefits otherwise payable for the injury under this chapter.”

The intent of this law is to prevent people injured in car accidents from recovering twice for the same benefit, such as wage loss benefits from both Social Security and no-fault PIP coverage. However, in this situation there is no duplication of government benefits. Instead, the VA was entitled to reimbursement for all medical services it paid related to the car accident. Thus, the health care benefits the plaintiff received from the VA were outside the scope of the of MCL 500.3109(1).

This decision by the Michigan Court of Appeals was a clear win for Michigan accident victims, in particular military veterans injured in a Michigan car wreck. This decision unequivocally states VA benefits are not subject to coordination of benefit language and that auto carriers assigned a claim through the Michigan assigned claims plan are primary for the payment of auto related treatment. Further, auto insurance carriers are not entitled to a set-off for medical benefits paid because the VA should not be paying these benefits in the first place.