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Automobile Club Insurance Association v Health and Welfare Plans. Inc; (USD-UNP, 6/7/1990; RB #1406)


United States District Court, Eastern District of Michigan; Docket No. 89-72264;  
Opinion by Judge Bernard A. Friedman; Unpublished  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 Friedman, an ERISA health insurance plan attempted to avoid-the priority rule of Federal Kemper by amending its coordination clause so as to convert it into a total exclusion for auto accident cases and then asserting that the amendment was retroactive to a date prior to the auto accident which gives rise to the payment of benefits.  

There was no question that the language in the health insurance plan prior to the amendment was clearly a coordination of benefits clause that purported to make the health plan secondary to coordinated no-fault coverages. This would be unenforceable under the Federal Kemper and Northern Group Services cases. Realizing the unenforceability of the clause, the defendant health insurer attempted to convert it into a total exclusion clause which would be enforceable under the federal court decision in Liberty Mutual v Iron Workers (Item No. 1291). Judge Friedman refused to permit the insurer to give such an amendment retroactive effect on the basis that it would constitute conduct by the trustees of the plan that was "arbitrary and capricious."  

The court also rejected the argument that ERISA preempted state law because this plan was a "voluntary association of employees." In rejecting this argument, the court relied upon Udell v Georgie Boy Manufacturing Inc (on remand) (Item No. 1162) that specifically rejected such an argument in light of the Northern Group Services case.   

The court also held that plaintiff’s reimbursement claim was not barred in this case by the statute of limitations. In this regard, the court stated that an action brought under §502(a)(l)(B) seeking pension benefits and clarification of rights is governed by the statute of limitations for actions on written contracts.

Lansing car accident lawyer Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

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