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Coordination of Benefits in Michigan

“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 oane 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

Going To Doctor Outside of Your Health Care 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

Can A Family Member Be Reimbursed For Providing Nursing Services?

“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, 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 layperson.

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 daycare 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 a doctor recommends 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 essential 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