Michigan Supreme Court; Docket No. 95960; Published
Opinion by Justice Brickley; 6-1 (with Justice Levin Dissenting)
Official Michigan Reporter Citation: 444 Mich 743; Link to Opinion 
STATUTORY INDEXING:
Coordination with Other Health and Accident Medical Insurance [§3109a]
TOPICAL INDEXING:
Private Contract (Meaning and Intent)
CASE SUMMARY:
In this 6-1 decision by Justice Brickley, the Supreme Court held that as a matter of contract interpretation, a no-fault insured is not entitled to receive duplicate payment for medical expenses where the insured had elected uncoordinated no-fault benefits, but has a health insurance policy containing a coordination of benefits clause.
Plaintiff’s minor daughter was seriously injured in an automobile accident in 1987. Plaintiff’s family had automobile no-fault insurance with State Farm. Plaintiff’s policy was an uncoordinated policy, meaning the automobile insurance would pay benefits regardless of whatever other insurance was available to the injured person.
At the time of the accident, plaintiff also had health insurance covering plaintiff’s family pursuant to Physicians Health Plan (PHP), a health maintenance organization. This insurance was provided to plaintiff through his employer, Meijer, Inc. The health insurance plan contained a coordination of benefits clause which purported to make plaintiff’s no-fault insurance primary to the extent that the insured is covered under any automobile related policy. Plaintiff’s daughter was treated and her expenses were paid in full by State Farm, the no-fault insurer. An action was filed seeking reimbursement of the same expenses from PHP which PHP denied, based upon its coordination of benefits clause.
The trial court granted summary disposition in plaintiff’s favor, on the basis that purchase of uncoordinated no-fault coverage and the payment of a higher premium for that coverage would be meaningless if the health insurer could enforce its coordination clause and restrict plaintiff to only one recovery. If that were to occur, plaintiff would get nothing for the extra premium he paid for uncoordinated no-fault coverage.
The Court of Appeals affirmed the decision of the trial court holding that unless the health insurer can demonstrate it lowered the health premium to reflect the insured's uncoordinated no-fault automobile insurance, the health insurer cannot rely on its coordination of benefits clause.
In reversing the lower courts, the Supreme Court held that the legislative intent of §3109a was to provide individuals with an opportunity to reduce premiums if they already had health insurance that covered automobile accidents. The purpose was not to provide a guarantee of double recovery regardless of whatever provisions might be contained in other insurance contracts.
The Supreme Court held that the Court of Appeals extended the reach of §3109a beyond a reasonable interpretation of the purpose of the legislature. That provision of the statute is intended to regulate the availability of coordinated no-fault coverage. It is a misconstruction of the statute to sweep regulation of "other health and accident insurance" that the insured may have into the no-fault act.
The court noted that this was the first opportunity it had to determine the outcome when a no-fault insurance policy is uncoordinated and a health plan is coordinated. The court reviewed other decisions where other possible combinations of coverage occurred and the various outcomes under those under decisions. Specifically, the court noted that when both the no-fault automobile insurance and the health insurance are uncoordinated policies, then multiple recovery is possible for the insured. Haefle v Meijer Inc, 165 Mich App 485 (1987). In the situation where health insurance is uncoordinated and the insured has elected to coordinate the no-fault insurance, the Court of Appeals has held that health insurance is primary and there cannot be duplicate recovery. Wiltzius v Prudential Property & Casualty, 139 Mich App 306 (1984). Another possible combination reviewed by the court occurs when both the health insurance and the no-fault policies purport to coordinate coverage. This is the circumstance governed by the Federal Kemper v Health Insurance Administration Inc, 424 Mich 537 (1986) decision. In that case, the Supreme Court held that when an insured opts to coordinate no-fault coverage with health insurance pursuant to §3109a, the health insurer is primarily liable for the payment of medical expenses.
In distinguishing the present case from Federal Kemper, supra, the Supreme Court held that the decision in Federal Kemper resolved a conflict between competing coordinated benefit provisions of no-fault automobile insurance policies and health insurance policies. In a conflict of coordination clauses between the no-fault carrier and the health insurance carrier, in which each has included a coordination clause, it is reasonable for the group health care provider to be primarily liable. This is because the no-fault carrier complied with §3109a and received a reduced premium in exchange for the coordination of benefits clause. In the present case, the Court of Appeals misapprehends the Legislature's intent in adopting §3109a. That section does not require a health insurer to demonstrate a premium rate reduction to validate a coordination of benefits clause in the certificate of coverage. Section 3109a does not apply when the no-fault coverage is uncoordinated. Section 3109a controls the treatment of the no-fault insurance, not the status of health insurance.
The Supreme Court also noted that there are strong policy reasons to discourage duplicate coverage, including the growing concern for the availability of insurance at affordable rates.
The Supreme Court, having decided that there is nothing explicit or implicit in §3109a to prevent enforcement of the coordination clause in the health policy, ruled that resolution of this case is a matter of simple contract interpretation. In this case, PHP's certificate of coverage is clear and unambiguous on its face.
The Supreme Court noted that its decision places the burden on the consumer to tailor no-fault coverage to the particular health insurance one happens to have. If the health insurance contains a coordinated benefits clause, the insured may be well advised to select the option of coordinated no-fault insurance at a lower premium.
In his dissent, Justice Levin would hold that the Legislature intended in this case that there be a so-called "double recovery," and that the effort of PHP to relieve itself of the burden of the medical costs arising out of the automobile accident is violative of §3109a. Justice Levin noted that in Federal Kemper, supra, the court had no difficulty finding legislative intent to prohibit health insurers from including coordination of benefits clauses where automobile owners had elected to coordinate. However, where an automobile owner elected not to coordinate, the majority finds no legislative intent. Justice Levin would hold that an automobile owner who elects not to coordinate does so to obtain the legislatively contemplated overlapping coverage, with the consequent double recovery.
