“I have medical insurance through work, and no-fault insurance on my car. If I am hurt in an accident, which policy pays?”
This is both one of the most common questions we hear, and one that does not have a single answer that fits all situations. When you have both medical insurance and car insurance in Michigan, you have to look at the “coordination of benefits” and “exclusions” sections in each policy to decide which pays for auto-related injuries.
All no-fault car insurance policies in Michigan have medical coverage. If you have “PL/PD” on your vehicle, you have medical benefits, too. If your no-fault benefits are “coordinated” or “excess,” that means your health insurance has to pay the bill first. It is possible that your car insurance will pay amounts over and above what the health insurance pays, but the health insurance is “primary.”
If your health insurance has an exclusion for auto-related claims, that makes it easy. Your car insurance pays the bills.
If both your health plan and auto insurance are coordinated (that is, each policy says the other policy is primary), the health insurance pays first.
If you pay extra and buy “full” medical coverage on your car insurance, both the medical insurance and car insurance may pay. This means you might be able keep the check your no-fault company sends you to pay the medical that was already covered by your health insurance (this is called “double dipping.”) That is perfectly acceptable to do, because you paid extra for the auto coverage to allow that. But be careful—if you misinterpret the language in either your health insurance or auto policies, you could be responsible to pay the medical bills yourself from the check your auto carrier sends you.
Lastly, be aware that certain kinds of employer health plans are organized under a federal law called ERISA. That type of health plan may have the responsibility to pay your accident-related medical bills, but may also demand that you repay the health plan for the money it spent if you get compensation from another driver who caused the accident.
As you can imagine, the issue of coordination of benefits is a topic that even specialist lawyers are constantly debating and studying. A judge once remarked: “The only thing worse than having no insurance policy in an auto accident is having two policies.”
Source: 450 F3d 643