U.S. District Court for the Eastern District of Michigan, Southern Division; Docket No. 98-40195;
Honorable Paul V. Gadola; Published
Official Federal Reporter Citation: 36 F. Supp. 2d 957; Link to Opinion
In this written Opinion by Judge Gadola, the court held that where there was a direct conflict of competing coordination of benefit clauses in a self-funded ERISA benefit plan and a no-fault automobile insurance policy through Allstate, under federal common law, the no-fault automobile insurance policy was determined to be primary and the ERISA plan was determined to be secondary, for purposes of covering medical expenses arising from a motor vehicle accident.
In his analysis of the two competing policies, Judge Gadola noted that both the ERISA plan and the Allstate policy contained coordination of benefit provisions. The court noted that the Michigan Supreme Court in ACIA v Frederick & Herrud, 443 Mich 358 (1993), carved out an exception from the provisions of section 3109a, which ordinarily would allow a no-fault insurer to become secondary to other health and accident insurance coverage applicable to an automobile accident. The exception applies to privately sponsored policies created under federal law pursuant to ERISA.
The court determined that the two competing coordination of benefit clauses in the ERISA plan and the Allstate Insurance policy were indeed in conflict. This conflict, according to Auto-Owners Insurance Company v Thorn Apple Valley, 31 F3d 371 (6th Cir, 1994), should be resolved pursuant to federal common law. The court determined that the ERISA plan at issue did indeed “expressly disavow” claims arising from automobile accidents that are covered under other health plans. Therefore, the terms of the ERISA benefit plan must be given priority over the Allstate no-fault personal protection policy, thereby making the Allstate policy primary for purposes of covering the claim for accident related benefits.