United States District Court Western District of Michigan; Docket No. G87-857-CA1;
Judge Robert Holmes Bell; Published
Official Federal Reporter Citation: 698 F Supp 1350; Link to Opinion
Coordination with Other Health and Accident Medical Insurance [§3109a]
One-Year Notice Rule Limitation [§3145(1)]
Applicability of Limitations Period to Claims by Insurers Against Other Insurers [§3145]
Revised Judicature Act – Miscellaneous Provisions
In this Opinion by Judge Bell, the Federal District Court for the Western District of Michigan held that a health insurance plan that contains an absolute exclusion denying payment of any medical expenses incurred as a result of an automobile accident could validly be enforced in spite of the Michigan Supreme Court's decision in Federal Kemper (Item No. 897) and the Sixth Circuit Court of Appeals decision in Northern Group Services (Item No. 1090). However, if the health insurance clause is an "escape clause" which conditions a denial of benefits upon the availability of no-fault insurance, then such a clause cannot be enforced. The Court expressed the concept in the following language:
"This Court recognizes the validity of clear and unambiguous exclusions of coverage for auto accident related injuries and employee benefit plans. This Court determines that exclusions which are absolutely stated without reference to the existence of other insurance are distinct from the three identified types of coordinated benefits providing in Federal Kemper ['escape' or 'other insurance,’ excess, or pro rata]. Thus, Federal Kemper and Northern Group Services do not properly control the present case because they both dealt with coordinated benefits provisions, not exclusions."
The Court went on to dispose of the cases before it by invalidating those health insurance clauses that conditioned their exclusion on the availability of no-fault and enforcing those clauses which unambiguously excluded medical expenses for any auto accident related injury.
The Court also held that the one year no-fault statute of limitations contained in §3145 of the Act did not bar this subrogation action filed by a no-fault insurer against the insurance companies to enforce the rights of no-fault insureds to collect benefits from health insurers. The Court stated, "the no-fault statute of limitations does not govern the rights of the insured employees to benefits under their health plans. Consequently, the no-fault automobile insurance act does not apply. Rather, the general six year statute of limitations (MCLA 600.5813) properly applies."