Michigan Court of Appeals; Docket No. 126885; Published
Judges Hood, McDonald, and Fitzgerald; Unanimous Opinion by Judge Fitzgerald
Official Michigan Reporter Citation: 190 Mich App 190; Link to Opinion 
STATUTORY INDEXING:
Coordination with Other Health and Accident Medical Insurance [§3109a]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous Opinion by Judge Fitzgerald, the Court of Appeals addressed an issue of first impression concerning whether a clause contained in the defendant's health insurance policy limiting benefits for injuries arising from an automobile accident to $5,000 was an invalid "escape" clause unenforceable under §3109a of the No-Fault Act.
The Court of Appeals held that the clause limiting the health insurer's liability to $5,000 in benefits was a valid exclusion and not an invalid "other insurance" escape clause. It was undisputed that the claimant was injured in a motor vehicle accident while insured by Transamerica's no-fault automobile insurance policy and by a health insurance policy issued by the defendant, IBA Health. The policy issued by Transamerica contained a coordination of benefits clause providing that the company was not liable to the extent that allowable expenses are paid or payable pursuant to health insurance coverage. The health insurance policy issued by IBA Health had a clause stating that it covered eligible expenses for injuries sustained in an automobile accident "in an amount not to exceed $5,000 per accident." The no-fault insurer contended that the health insurer had opted to provide coverage for auto accident related injuries; and therefore, the attempt to limit coverage to a dollar amount constituted an "other insurance" provision which should be construed as an attempt to coordinate benefits; and, therefore, under the holding in Federal Kemper (Item No. 897), the health insurer should be primary.
The Court of Appeals held that if an exclusion of coverage is stated absolutely in a health care policy without reference to other insurance, then it is not conditioned on the existence or non-existence of other insurance; and consequently, it differs from an "escape" type of coordinated benefits provision that is conditioned on the existence of other insurance. Where a health insurer opts to pay a specific sum for injuries arising from a motor vehicle accident regardless of the existence of any no-fault benefits, the limitation of benefits is a valid exclusionary clause if the exclusion is clear, unambiguous, and does not violate public policy. Consequently, the other health and accident coverage on the insured in this case was limited to the amount set forth in the health insurer's policy, and the no-fault insurer was liable for those expenses exceeding $5,000. The court distinguished the holding in Michigan Mutual Insurance Company v American Community Mutual Insurance Company (Item No. 1102) on the basis that the clause in that case contained language limiting the health insurer's liability to $300 "when benefits are provided under the No-Fault Act." The clause in that case was construed to be an escape clause which enabled the health insurer to escape liability and attempt to shift it to the no-fault insurer. Here, the clause clearly limited health insurance benefits to a dollar amount without reference to any other insurance.
