United States District Court for the Western District of Michigan; Docket No. 4:95-CV-38;
Judge Robert Holmes Bell; Unpublished
Official Federal Reporter Citation: Not Applicable; Link to Opinion
In this Opinion authored by Judge Bell, the court reconciled competing coordination of benefits clauses contained in an employment benefits plan and a no-fault automobile insurance policy. Although the court found that under the Employment Retirement Income Security Act (ERISA) the employment health plan terms would control over competing coordination clauses in the no-fault policy, the language of the employment health plan did not specifically coordinate its coverage with the benefits provided under the no-fault policy. In contrast, the no-fault policy in question issued by Allstate specifically subordinated its coverage to any applicable health plans.
This case was decided on cross motions for summary disposition, without the facts being in dispute. An employee of plaintiff Campbell Soup Company. Manuel Estrada, was covered under its ERISA health plan. Estrada's daughter, who was a covered dependent under the health plan, was injured in a vehicle fire and her medical bills were paid by the Campbell Soup health plan. Estrada's daughter was also covered under his policy of no-fault automobile insurance issued by Allstate. The Campbell Soup plan requested reimbursement from Allstate, but Allstate refused. Subsequently, the Campbell plan initiated suit in federal court to recover the benefits it had paid.
The court, citing Auto Owners Insurance Company v Thorn Apple Valley, 31 F3d 371 (CA 6, 1994) (Item No. 1730), held that where "a traditional insurance policy and a qualified ERISA plan contain conflicting coordination of benefit clauses, the terms of the ERISA plan, including its COB clause, must be given full effect." Thus, the court held that to the extent conflicting, the Campbell Soup plan would control over the Allstate policy.
The Campbell Soup plan provided that its benefits were coordinated with other "plans" covering the insured, and the term "plan" was defined to specifically exclude the insurance provided under "an individual policy you have acquired on your own." Under this definition, the court held that the Allstate Insurance policy, being a policy purchased individually by Estrada, did not constitute a "plan" as defined by Campbell Soup. The Allstate policy, on the other hand, clearly coordinated its coverage with any benefits paid by a health insurer. Therefore, the court held as a matter of law that the Allstate coordination of benefits clause controlled and that the Campbell Soup plan was the primary insurer for the medical costs at issue in the case.