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State Farm Mutual Automobile Insurance Company v Great-West Life and Annuity Insurance Company; (USD-UNP, 6/26/1997; RB # 1953)


United States District Court, Eastern District of Michigan; Docket No. 96-CV-70867-DT;  
Honorable Denise Page Hood; Unpublished  
Official Federal 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 by Judge Denise Page Hood, the court resolved a coordination of benefits dispute between a no-fault insurance company and an ERISA health plan which is very similar to the dispute resolved by the United States District Court in Item No. 1351. In the case at bar, Steven Bartholomew sustained injuries in a motor vehicle accident while he was insured under a no-fault policy issued by plaintiff State Farm and also an ERISA health plan. Both policies had coordination of benefits clauses. The COB clause in the ERISA health plan did not expressly disavow or subordinate its coverage to no-fault coverage. Rather, it utilized various tests to determine which of two plans were primary. The only test applicable to the case at bar was the "catch all" provision which stated that the plan that was in effect the longest was primary. Thus, the dispute in this case was to determine which coverage--no-fault or the ERISA plan-covered Mr. Bartholomew for the longest period of time, as that would be the primary coverage. In stating the issue in this manner, Judge Hood specifically rejected the notion that an ERISA plan must expressly disavow an insurance policy before an ERISA plan's COB provision is given effect. The court held that such a view would "render meaningless Congress’ primary goal of ERISA which is to safeguard the financial integrity of qualified plans by shielding them from unanticipated claims, such as those advanced by automobile no-fault insurance policies." However, all of the parties to the instant case agreed that the two coordination clauses were not conflicting but could be reconciled with the determination as to which plan was in effect the longest.   

With regard to the duration of coverage issue, Judge Hood concluded that the ERISA plan was in effect longer than the no-fault plan, and therefore, the ERISA plan was primary and no-fault was secondary. This conclusion was premised upon the fact that there was no evidence submitted that would support the conclusion that the no-fault coverage was continuously in effect longer than the ERISA coverage. Therefore, under the duration of coverages provision in the ERISA COB clause, the ERISA plan rendered itself primary.

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