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State Farm Mutual Insurance Company v Muer Corporation; (COA-PUB, 8/19/1986; RB #951)


Michigan Court of Appeals; Docket No. 85099; Published  
Judges Kelly, Shepherd, and Simon; Unanimous; Opinion by Judge Kelly; Per Curiam    
Official Michigan Reporter Citation: 154 Mich App 330; Link to Opinion    

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 unanimous Opinion by Judge Kelly, the Court of Appeals addressed the interplay between allowable expense coverage contained in a no-fault automobile insurance policy and its relation to similar medical expense coverage provided by an employee benefit plan not funded by insurance.

The injured employee was insured through State Farm Insurance and for a brief period following his accident, received payment of some of his medical expenses from State Farm. Upon discovering the existence of an employee benefit plan which also provided medical expense benefits, State Farm refused any further payments and commenced a declaratory judgment action against defendant, C. A. Muer Corporation and its employees' medical benefit plan. The "Muer Plan" is uninsured and is funded by the defendant corporation. Both the Muer Plan and the State Farm Insurance policy contained coordination of benefits clauses. State Farm claimed that §3109a, which requires no-fault insurers to provide insureds with the option of purchasing a coordination of benefits clause, required that the competing coordination of benefits provisions be construed and coordinated in accordance with Michigan law.

The Court noted that the recent Michigan Supreme Court case of Federal Kemper Insurance v Health Insurance Administration (Item No. 891) had interpreted §3109a as imposing primary liability upon the health insurer where an insured is also covered by a no-fault policy containing a coordination of benefits clause. However, in this case, the Court held that Michigan law does not apply because it is preempted by the provisions of the Employment Retirement Income Security Act (ERISA). Under the provisions of that Act, the Court held that the federal statute preempts any state laws relating to such plans, and therefore, the federal laws govern. Since the Muer Plan was not insured by a commercial insurance company, it was not subject to the insurance laws of Michigan under the savings clause of ERISA. Therefore, §3109a of the No-Fault Act does not govern the party's liability for coverage in this case.

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