U.S. District Court, Eastern District of Michigan; Docket No. 93-70555
Honorable Paul V. Gadola; Unpublished
Official Federal Reporter Citation: Not Applicable; Link to Opinion
Motorcycle First Party Coverage: Duty to Offer / Coverage Available [§3103]
In this memorandum Opinion, Judge Gadola granted summary disposition in favor of a group health plan in a suit seeking health coverage for automobile accident injuries, on the basis that a provision in the plan excluded coverage for expenses arising from motor vehicle accidents.
Plaintiff was injured when he lost control of his motorcycle and struck a parked vehicle. At the time of the accident, plaintiff’s motorcycle was not covered by no-fault insurance. However, plaintiff was enrolled in a group health plan through his employer which was administered by Corporate Group Systems (CGS), and which was qualified under the Employment Retirement Income Security Act of 1974 (ERISA). CGS denied coverage for the expenses associated with the injury under a provision contained in the group health plan that excluded coverage under the following circumstances:
"For any injury arising out of the ownership, operation, maintenance or use [to include passengers], including loading and unloading of any motor vehicle coverage, which are eligible to be covered under a Michigan no-fault insurance policy or similar no-fault policy."
Upon denial of his claim, plaintiff filed suit in Wayne County Circuit Court alleging breach of contract. The case was removed by defendant to federal court on the basis that a federal question of jurisdiction existed under the provisions of ERISA. The court held that plaintiffs state law claims were barred by the preemption provisions of ERISA.
The court then considered plaintiffs complaint as if brought pursuant to the relevant provisions of ERISA regarding the obligations of the plan administrator. The court noted that the decisions of the group health plan administrator may only be disturbed upon a finding that such decisions were "arbitrary and capricious."
The court rejected plaintiffs argument that his motorcycle was not a "motor vehicle," as that term is utilized in the group health plan, noting that Michigan courts have held otherwise. While plaintiffs motorcycle was not required to be insured under the Michigan no-fault act, the court noted that owners of motorcycles are in fact eligible for no-fault coverage under §3103(2). Accordingly, the court held that the exclusion contained in the group health plan was applicable so as to preclude coverage to plaintiff for this accident and granted the defendant health plan summary judgment.