Michigan Court of Appeals; Docket No. 109023; Published
Judges McDonald, Sullivan, and Reilly; Unanimous; Per Curiam
Official Michigan Reporter Citation: 179 Mich App 389; Link to Opinion 
STATUTORY INDEXING:
Work Loss Benefits: Nature of the Benefit [§3107(1)(b)]
Work Loss Benefits: Relevance of Wage Continuation Benefits [§3107(1)(b)]
Standards for Deductibility of State and Federal Governmental Benefits [§3109(1)]
Other Benefits [§3109(1)]
Coordination with Other Health and Accident Medical Insurance [§3109a]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this significant, unanimous per curiam Opinion, the Court of Appeals held that a no-fault insurer may not subtract employer paid wage continuation benefits from no-fault wage loss benefits under a coordinated no-fault policy. The plaintiff in this case was an employee of Ypsilanti Township and received wage continuation benefits from his employer pursuant to a collective bargaining agreement. The wage continuation benefits paid the difference between plaintiffs base pay and any amounts recovered under workers' compensation. In ruling that the no-fault insurer could not offset the wage continuation benefits from no-fault wage loss benefits, the court made several significant holdings:
1. The court relied upon Brashear v DAIIE (Item No. 860) and found that a plaintiff who receives formal wage continuation benefits because he cannot work as a result of an auto accident disability has nevertheless suffered a "work loss" as defined in §3107(b).
2. The fact that the wage continuation benefits were paid to plaintiff by his governmental employer (the Township) did not make the wage continuation benefit a governmental benefit that could be setoff under §3109(1). The court held that the wage continuation benefits in this case were not paid pursuant to any state or federal law, but instead were paid pursuant to a collective bargaining agreement with the local township. The court distinguished the case of Krygel v City of Detroit (Item No. 740) on the basis that in Krygel, the city charter benefits were paid pursuant to the statute that expressly provided for an election between city charter benefits and workers' compensation benefits.
3. The court held that the wage continuation benefits could not be properly setoff under a no-fault coordinated benefits provision written pursuant to §3109a for the reason that this section only permits coordination with "other health and accident coverage.” The court relied strongly on the previous decision in Orr v DAIIE (Item No. 183) which precluded coordination with employee sick leave time. Like sick leave benefits, wage continuation benefits payable to a collective bargaining agreement are not "other health and accident coverages" subject to §3109a coordination of benefits. The court noted that even though several recent cases have expanded the scope of coverages included within the meaning of "other health and accident coverage," those cases have primarily dealt with benefits that were genetically very similar to typical health insurance benefits. Even though there was some suggestion in the drafter's comments to the Uniform Motor Vehicle Accident Reparations Act (UMVARA) suggesting that a coordination of benefits clause would justify setting off wage continuation benefits, the court noted that the Michigan Legislature chose to use the phrase "other health and accident coverages" in describing the class of collateral benefits that could be subject to coordination. Employer provided wage continuation benefits did not fall under that class.
