Wayne County Circuit Court; Docket No. CA No. 81 117-198 CK; Unpublished
Judge Paul S. Teranes; Written Opinion
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Standards for Deductibility of State and Federal Governmental Benefits [§3109(1)]
Veterans / Military Benefits [§3109(1)]
Coordination with Other Health and Accident Medical Insurance [§3109a]
12% Interest Penalty on Overdue Benefits – Nature and Scope [§3142(2), (3)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this 12 page Opinion, Wayne County Circuit Judge Paul Teranes ruled that United States Navy and Veterans Administration benefits which paid for all hospitalization and medical care rendered to plaintiff as a result of an automobile accident which occurred while he was in active military service are not government benefits under §3109(1) but rather should be considered "other health and accident coverage" and thus, not subject to setoff unless the plaintiff had purchased a coordinated benefits policy under §3109a of the Statute. The court reasoned that Navy and VA benefits are similar to Medicare benefits and thus, under the Supreme Court's opinion in LeBlanc v State Farm (item number 414) can only be offset if plaintiff has a no-fault coordinated benefits policy. The court held that the two-pronged test set forth in the Supreme Court's recent opinion in Jarosz v DAIIE (item number 702) is not applicable to this case because the Jarosz Opinion did not deal with "other health and accident coverages" under §3109a but rather dealt with identifying those coverages which should be offset under §3109(1). The Court observed that "other health and accident coverages" under §3109a can be from either a private or governmental source. It was clear in the LeBlanc decision that the Supreme Court had rejected the private sector/governmental sector dichotomy in defining which benefits were controlled by §3109a. In essence, the Navy/VA benefits are akin to fringe benefits available to an employee in the private sector. As such, they are subject to setoff only where the insured opts to coordinate private collateral coverages with no-fault benefits by purchasing the coordinated benefits policy. The court also noted that had plaintiff requested his insurance company to sell him coordinated benefits because of his Navy and Veterans coverage, his insurance company certainly would have done so. Judge Teranes stated, "The health and accident coverage in question is a benefit offered by the USN to those persons who are members of the USN and is a benefit mat lasts as long as the person is a member of the Navy or until Congress revokes that benefit In the case of the latter two events occurring, the insured would men have to get other health and accident coverage or discontinue his coordinated health and accident benefits under his no-fault policy and pay the necessarily higher premium for full health and accident benefits under the terms of his no-fault policy."
Judge Teranes also held that the defendant was liable to pay interest under §3142 of the Statute regardless Of the merits of the dispute involved. However, defendant did not owe attorney fees under §3148 of the Statute inasmuch as the case involved a "legitimate judicable issue" regarding coordination of benefits.
