Michigan Court of Appeals; Docket No. 66396; Published
Judges Walsh, Beasley, and Sullivan; Unanimous; Per Curiam
Official Michigan Reporter Citation: 131 Mich 268; Link to Opinion 
STATUTORY INDEXING:
Coordination with Other Health and Accident Medical Insurance [§3109a]
Coordination with HMO and PPO Coverages [§3109a]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous per curiam Opinion, the Court of Appeals dealt with the troublesome issue of priority of payment when an accident victim has a no-fault coordinated benefits "policy and also has "coordination language" in other collateral health coverages. The specific issue in this case was, however, rather limited due to the unique nature of the language in the victim's other independent health coverage.
The accident victim in this case had a no-fault coordinated benefits policy with plaintiff US&G. In addition, he also had health coverage under a group subscriber contract with defendant, a federally qualified and state licensed health maintenance organization (HMO). US&G contended that under §3109a, it had a valid coordination of benefits clause with its insured which required US&G to only pay those medical expenses which were not covered under the insured's HMO. Defendant HMO argued that its health coverage was not the type which could be coordinated with no-fault coverage under §3109a because it was not "health and accident coverage" as that term is used within the coordinated benefits section of the Statute.
The Court of Appeals rejected defendant HMO's argument and held that even though the HMO coverage was not traditional "insurance," §3109a was not limited solely to traditional insurance but rather relates to "health and accident coverage." The Court stated that "the term used, 'coverage' is a broad term. Accordingly, we hold that the services offered by defendant are 'health and accident coverage' as defined by §3109a."
The Court then went on to hold that US&G's coordination clause was indeed enforceable, thus making defendant HMO primarily liable for medical expenses. It is important to note, however, that the basis of this holding was the fact that the language of the coordination clause in defendant HMO's contract and the applicable coordination of benefits provision in 42 USC 300e(b)(l) were ambiguous. To this effect, the Court stated, "Although plaintiff’s excess liability clause may not be easy for a layman to understand, once deciphered, it clearly states that the insurer has only secondary liability. On the other hand, defendant's excess liability clause is not so clear. Although it clearly tells the participant that he will not receive double recovery, it does not so clearly state that the participant must first look to the other benefit provider. First, it only states that benefits provided by defendant 'may be reduced'. Second, whether a claimant must merely qualify for or actually receive other benefits for the provision to operate is unclear. ... Ambiguities in an insurance contract are liberally construed in the insured's favor... Because plaintiff’s 'excess liability' clause clearly states that it provides only secondary coverage while defendant's 'excess liability' clause does not so clearly state, we hold that defendant is primarily liable in this case."
[Author's Comment: The major question that is unresolved in this case is what happens when the coordination of benefits provision in the no-fault policy and the coordination provision in the health insurance policy are equally clear and unambiguous? Who pays first in that case — the no-fault carrier or the health carrier? To date, this issue has not been squarely presented to an appellate court.
