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Allstate Insurance Company v The Sherwin-Williams Company Group Comprehensive Health Care Coverage Plan; (USD-UNP, 10/20/1999; RB #2107)


U.S. District Court for the Western District of Michigan; Docket No. 5:98-CV-118;
Honorable Richard A. Enslen; Unpublished
Official Michigan Reporter Citation:  Not Applicable; Link to Opinion alt  

Coordination with Other Health and Accident Medical Insurance [§3109a]   
Coordination with ERISA Plans [§3109a]

Employee Retirement Income Security Act (ERISA – 29 USC Section 1001, et seq.)   

In this written Opinion, Judge Enslen resolved a dispute regarding the payment of medical benefits between an ERISA health plan and a no-fault insurer with a coordinated benefits policy. The court held that the ERISA plan had primary liability and that the no-fault coordinated insurer had secondary liability.

The basis for the court's holding was that (1) the ERISA plan contained a procedure to determine whether it or a competing plan was primary and under the rules set forth in this procedure, the ERISA plan had primary liability and the no-fault policy secondary liability; (2) the no-fault insurer with the coordinated policy (in this case, plaintiff Allstate Insurance Company) was not obligated to exhaust its administrative remedies because an insurance company's claim for reimbursement asserted a "federal common law right" which did not require exhaustion of administrative remedies; and (3) the ERISA plan was not entitled to exercise its "right to reduce clause" for the reason that the assertion of such a right would be "arbitrary and capricious and would render meaningless the plan's own coordination of benefits clause."  Therefore, plaintiff Allstate Insurance Company, as the coordinated no-fault insurer, was entitled to summary disposition that the ERISA plan had primary liability for payment of medical expense benefits to the extent that the medical expenses were covered under the provisions of the ERISA plan.

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