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News & Case Results

Matz Injury Law Blog

  • May



    PIP and Social Security payments

    “Do I have to repay Social Security benefits if I get an automobile case settlement?”

    In some situations yes, in others, no.

    A person who has a sufficient employment work history, and who is severely injured in a motor vehicle accident, may qualify for Social Security Disability (SSD) benefits. However, the no-fault carrier for that person is entitled to a credit of whatever amount of SSD payments the individual would receive. For example, if the disabled worker qualifies for $1000/month no-fault wage loss benefits, and also qualifies for $600/month SSD, the SSD will pay the $600, and no-fault $400. The individual would still get $1000 total, but not the sum of $1000 and $600. You do not have to repay SSD benefits out of any settlement you receive from the driver who caused the accident.

    Remember: no-fault wage loss has a maximum term of three years from the date of the accident. After the three years, if the injured person still qualifies for SSD, the amount received would go back to the full amount that Social Security alone pays. In the above example, the person would start receiving $600/month after the three year anniversary of the accident.

    There is a different, and very important concern for people who receive Supplemental Security Income (SSI) , and who are injured in a collision. SSI pays benefits for people who have disabilities that have prevented them from working for a long time. If such a person is injured in a car accident (or has money coming from any kind of case or other source), the SSI benefits may be cut off, or greatly reduced. This is because there is an upper limit to how much money an SSI recipient can have before the benefits are taken away.

    There are Special Needs Trusts, and Pooled Trusts, that can shield settlement money from being counted against SSI benefits. These trusts have significant limitations as far as your being able to use the funds, although these limitations are usually preferable to having SSI benefits terminated or reduced.

    It is important to recognize the difference between SSD and SSI, and to be sure that your lawyer takes the necessary steps to assure that you are receiving all the funds that you are entitled to, without jeopardizing your benefits.

    A person who receives SSI, and who will be getting money from an auto case or other source, needs to consult with an attorney who understands the differences in these benefits, and who takes them into account from the beginning of your injury case.

  • May



    Can a family member provide attendant care?

    “Can a family member, rather than a health aide, be reimbursed by no-fault for providing nursing services to an auto accident victim?”

    Yes, although there are several points to keep in mind. First of all, the injured family member must be hurt severely enough that a doctor recommends the need for home health services, such as changing bandages, helping with bathroom needs, bathing, transfers from bed to chair, and so on. Secondly, the services must be of the skill level that a family member can reasonably perform, such as mentioned in the list above. Skilled nursing services such as placing or cleaning catheters, or giving injections of medication, might have to be provided by a licensed or certified health professional, not a lay person.

    Next, the type and amount of services must be reasonable, necessary and related to the injuries from the collision. In other words, the no-fault carrier will certainly question whether 24 hour a day care is necessary for a person with a broken wrist, or whether three family members at a time should be reimbursed for helping to change the bandage on a family member’s sprained ankle.

    Finally, the rate of pay for providing the care will be negotiable. The insurance company will usually offer an amount around the rate that a health care agency pays the unskilled workers they send to a home to provide the care—not the rate the agency itself charges the insurance company, which includes the overhead that the agency has in addition to paying the worker. However, family members who provide unskilled services that are recommended by a doctor can argue that they have overhead, too, such as keeping track of the work they do and the time it takes to do it, and for any expenses that they incur as part of giving the care, such as going to the store to purchase health-related items that are part of the care, or for taking classes to learn how to provide more advanced levels of care.

    If an agreement is reached between the family and the insurance company for having a family member provide in-home care, please remember that the amount the family member receives is income that must be reported to the IRS and any state and local tax authorities. The insurance company will send a Form 1099 to any caregiver who receives direct reimbursement from the company. The tax considerations are an important part of the decision whether it makes financial sense for a family member to provide in-home care, or to allow an agency to send in a worker who will do the work.

    Source: 114 Mich App 171; MCL 500. 3107

  • May



    College students and wage loss

    “Can a college student who had worked in the summer collect wage loss if injured in an auto accident during the school year?”

    Yes, assuming that the student could prove that he or she would have been able to return to employment if not for being injured in the accident.

    For example, let’s say Kim is a college student and a Michigan resident who qualifies for no-fault benefits under her parents’ policy. Kim is injured in a car accident while away at college. The accident happens in the spring, a few weeks before the semester is over, and is serious enough that Kim will be on crutches for most of the summer.

    Let’s also say that last summer, Kim had a full-time job at a hardware store, and that the owner of the store agrees that she would have hired Kim again this summer if Kim hadn’t been hurt.

    With that kind of proof, Kim should qualify for wage loss reimbursement through her parents’ policy, based upon the rate of pay she received last year. Of course, if she recovers well enough during this summer to go to work before the beginning of the school year, she will do so, and the wage loss benefits will end.

    The same principle applies to any workers who were temporarily unemployed at the time of the accident, but who have proof that they would have returned to work if the accident had not caused them to be disabled during some or all of the time that they would have worked.

    Source: 87 Mich App 93

  • Apr



    Injured by federally-owned vehicle

    “Can I recover no-fault damages and pain and suffering damages if I am injured by a federally-owned vehicle, such as a mail truck?”

    Not unless you can prove that the vehicle and its driver were at fault. The Federal Tort Claims Act (FTCA) allows you to sue the government for injury incidents, but only if you can prove that the driver, not you, caused the incident.

    If you can prove that, you can seek any damages you can prove. If the accident happens in Michigan, and you have auto insurance coverage (even if you were a pedestrian), your Michigan no-fault benefits will pay your wage loss and medical expenses in the usual fashion. You would still sue for pain and suffering under the FTCA, although Michigan law would still apply in your federal suit to the extent that you would have to prove that you have a “threshold” injury such as serious impairment or disfiguring scarring.

    If you were so unfortunate as to have been 1) hit by a mail truck 2) in Michigan, it was 3) your fault and 4) you aren’t covered by any no-fault policy of your own or a resident relative, you would have to apply to the Michigan Assigned Claims Plan for you no-fault coverage.

    A final word: Don’t try to handle this type of claim yourself. There are strict time limits and procedural requirements under the FTCA that you must follow, or your case will be dismissed. Look for a lawyer who not only handles auto cases, but who knows the FTCA specifications as well.

    Source: 599 F3d 540

  • Apr



    Postal Worker/PIP/FECA

    “I’m a postal worker hurt on the job in a motor vehicle crash. Do I have to repay my workers comp from any settlement money I get from the accident?”

    There’s bad news and good news on that issue. Remember, the situation discussed below applies only to federal workers, not to state workers compensation situations. We are also talking about situations where another driver was at fault—if you are at fault, none of this will apply to you.

    Postal workers and many other federal employees have workers comp through the Federal Employees Compensation Act (FECA). If you are a worker covered under FECA, and are hurt on the job (no matter who is at fault), your FECA benefits pay medical and wage loss expenses. If the other person was at fault, you may also have a liability claim for money damages for pain and suffering, which would be over and above the medical and wage loss claims. Your pain and suffering claim would go against the insurance for the driver who caused the injury, not your FECA policy.

    If you are in an injury incident involving a motor vehicle in Michigan, and you were on the job when this happened, you may also qualify for no-fault benefits through your own car insurance policy, even if you weren’t in your own car. Initially, your auto carrier will decline to pay any medical or wage loss claims from the accident—the insurance company will say that FECA has to pay those, since you were on the job when you were hurt.

    But the FECA law says that you have to repay FECA for any medical and wage loss benefits you receive if you are injured on the job and you receive a settlement or other money from the person who caused your injuries. This may result in a situation where the amount FECA paid out to you or for your expenses is greater than the amount of the settlement. You would end up getting nothing in that situation, if that’s the way things worked.

    Now the good news. Because the FECA benefits can be taken back out of any settlement you receive, if that happens, you can then apply to your no-fault insurance to have that company reimburse you for the amount you had to repay to FECA. The reasoning behind this is that, if you had to repay the benefits, you ended up not really getting any benefits. The case (if it is a Michigan case) ends up being a standard no-fault claim, where your own insurance company (or whichever company is highest priority in your situation) has to pay the benefits for auto-related wage loss and medical bills.

    Your lawyer would first work out repaying FECA from your settlement. Then an agreement would be reached to have the no-fault company pay you back whatever amount was taken out of your settlement to repay FECA.

    As you can see, this gets a bit complicated, but it is something that can be worked out through careful case management and proper negotiation.

    Source: 431 Mich 164

  • Apr



    “Common Law Marriage” in Michigan

    “How long do unmarried people in a relationship have to live together to have rights under ‘common law marriage’ in Michigan?”

    The answer is: there is no such thing as a common law marriage in Michigan, at least not since 1957. While many people think that “living together” in an exclusive relationship means that they gain legal rights toward one another after a certain time, this is not true.

    Michigan law defines marriage as a civil contract between a man and a woman who are legally capable of giving consent (for example, old enough; mentally competent) and who obtain a marriage license and whose marriage is conducted by a legally-authorized person. You have to meet all of these conditions in order to be married within the borders of Michigan.

    There are important social, political, family and legal issues that surround the definition of “marriage” in Michigan. Not the least of these is that the no-fault law does not recognize unrelated people who live together in a paired relationship, but who are not married, as being eligible to receive each other’s no-fault benefits such as survivors loss.

    That is not likely to change, unless the definition of “marriage” is changed first.

    Source: MCL 551.2

  • Apr



    Medicare, Medicaid and No-Fault benefits

    “Who pays my auto-related injury medical bills if I am a Medicare or Medicaid recipient?”

    Many of our clients have been injured in automobile or other motor vehicle collisions. Those who are eligible for Medicare or Medicaid often ask if they should use these governmental benefits to cover their medical expenses related to the crash, or whether their auto insurance will cover those bills.

    The answer is: your no-fault insurance is the proper source for medical payments in these situations. Medicare and Medicaid are not obligated to cover injuries caused by motor vehicle collisions in Michigan. Because we have a no-fault auto insurance system to cover these expenses, Medicare and Medicaid can save money by not duplicating the no-fault coverage. However, sometimes the bills are sent to the government agency by mistake, and are paid before anyone realizes that the bills are not the responsibility of Medicare or Medicaid. The government will want that money back — from you!

    If you qualify for Medicare or Medicaid, or both, and you are injured in an incident involving a motor vehicle, please be sure that the hospitals or medical offices you visit for treatment have your auto no-fault claims information on file from the beginning. This will reduce the possibility that Medicare or Medicaid will be billed for these services. When Medicare or Medicaid make such payments, the programs have a right to recover–from you–the money they paid in error. This can complicate and delay your case for money damages, because Medicare and Medicaid can place a lien (hold) on your settlement until they are paid back.

    Your no-fault carrier is responsible to repay Medicare or Medicaid for expenses that were mistakenly covered by governmental benefits. But you don’t want to be in that position, because if your no-fault insurance declines your bills because it says that the injuries are not auto-related, you could be stuck in the middle of a dispute in which Medicare doesn’t pay because it says your injuries are auto-related, and where your no-fault says that they are not. Meanwhile, you are personally responsible for paying for any medical care you receive, and disputes with your insurance company do not change that fact!

    To summarize: Never use your Medicare or Medicaid benefits to pay for anything to do with your treatment for motor vehicle injuries! Use your no-fault coverage. That is the way no-fault works.

    Source: 437 Mich 368; 404 Mich 477

  • Apr



    COB/Going out of health network

    “I was hurt in a car accident. If I want to go to a doctor who is not in my health care network, will my no-fault auto insurance pay that doctor’s bills?”

    Most likely not. If you have a health network plan that only covers doctors in the plan, you need to get permission from your health plan to go to an “outside” doctor if you want the health plan to cover the service. You usually aren’t going to get that permission, unless you are seeking a service that isn’t covered by your plan in the first place, or unless there are no doctors in your plan who are involved in the specialty you need.

    If you don’t get approval from your health plan in advance to seek a service outside the plan, don’t expect your health plan to cover it. If your injuries were auto-related, you might think that you can go to any doctor you wish, and that your car insurance will cover any service that was “out of network” with your health insurance.

    Unfortunately, Michigan no-fault coverage doesn’t work that way. If you go “out of network” on your health coverage for reasons other than those mentioned above, neither your health coverage nor your car insurance has to pay the bills for those services. The idea behind this is that your health insurance under these types of plans is supposed to pay for your care, and you can’t try to get around the network rules and make the auto coverage pick up the tab.

    Please also remember that your no-fault carrier always has the right to question whether the care you are seeking is reasonable, necessary, and related to the collision. It is the auto carrier, not you, who gets to make that decision initially. This is another reason that you want to stay within the boundaries of your health insurance coverage (if you have any) when you are in a car accident. There is never any guarantee that your car insurance is going to pay for any care you receive, and going out of the “mainstream” for exotic treatments or to unfamiliar “specialists” increases the chances that you will end up having to pay for your treatments out of your own pocket.

    Source: 251 Mich App 260; 444 Mich 301

  • Mar



    Sick Leave Time/PIP benefits

    “Can my auto insurance company make me use up all my sick days at work before I can draw no-fault wage loss?”

    This is an issue that comes up very often in our practice. The answer is “No.” You do not have to “use up” all of your accumulated paid days off at work before your auto wage loss benefits begin. If you get hurt in an auto accident in Michigan, and you are taken off work by your doctor, you can start drawing your wage loss from your car insurance from the first day off. You don’t have to exhaust your “sick days” through your job first. This time off is not “other health and accident coverage” that the auto carrier can try to subtract from your benefits (that subtraction is called “coordination of benefits”).

    Source: 90 Mich App 687

  • Mar



    Your settlement is not taxable

    “Is the settlement I received as a result of my motor vehicle collision taxable?”

    A settlement received in connection with your lawsuit for pain and suffering due to injuries sustained in a crash is not taxable. These damages represent compensation to you for physical and emotional pain and suffering incurred because of the collision. The IRS Code has consistently held that compensatory damages received on account of a personal injury are excludable from gross income.

    In order for a settlement or award to be excluded from income, it must be based out of an action for “tort or tort type rights,” and “must provide the availability of a broad range of damages, such as damages for emotional distress, pain, and suffering.” A personal injury case arising out of the negligent operation of a motor vehicle satisfies this requirement.

    The second requirement is that the damages must be received “on account of personal injuries or sickness.” A leading example by the Supreme Court considered this very issue, where a “taxpayer who is injured in an automobile accident sues for (1) medical expenses, (2) pain, suffering, and emotional distress that cannot be measured with precision, and (3) lost wages.” According to the Court, “the second requirement would be met for recovery of (1) the medical expenses for injuries arising out of the accident, (2) the amounts for pain, suffering and emotional distress, and (3) the lost wages as long as the lost wages resulted from the time in which the taxpayer was out of work due to the injuries sustained in the accident.”

    Additionally, Rev. Rul. 85-97, 1985-2 C.B. 50 concludes that the entire amount of a settlement received by a taxpayer who was injured after being hit by a bus was excludable from gross income as “amounts received on account of personal injuries” and therefore not taxable.

    Commissioner v. Schleier, 515 U.S. 323 (1995), and Rev. Rul. 85-97, 1985-2 C.B. 50.  For more information, click here and go to page 3.

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