Does Health Insurance Cover Car Accident Injuries in Michigan?
Reposted with permission from: Michigan Auto Law
Written by: Steven Gursten, Auto Accident Attorney, Michigan Auto Law
Also read the associated blogs below:
Qualified Health Coverage (QHC) and Michigan No Fault Insurance: What You Need to Know
Does Medicaid Cover Auto Accident Injuries Under New Law?
Does Medicare Cover Auto Accident Injuries Under New Law?
Michigan Auto Insurance Reform Savings Debunked
What is PIP Insurance in Michigan?
Does Health Insurance Cover Car Accident Injuries in Michigan?
Yes. Health insurance covers car accident injuries in Michigan. Generally, it will pay when a person has coordinated No-Fault auto insurance or when medical bills exceed a certain dollar amount. However, some health plans exclude auto accidents and fail to cover all of the necessary services covered by No-Fault.
Health insurance plays a substantial role in covering car accident injuries for crash victims, which is why the Michigan No-Fault law allows drivers to “coordinate” their health insurance and No-Fault coverage so that it pays first in the event of an accident.
But with the new auto No-Fault law in Michigan and new PIP cap levels available to consumers, expect health insurance to now play an even larger role. Our attorneys see health insurance now providing more coverage to car accident victims when medical bills exceed No-Fault PIP medical benefits coverage levels. Nevertheless, some of the same complications that people have contended with in the past with health insurance covering car accident injuries will continue to exist. These include: auto exclusions; coverage limitations; and limitations on coordination.
When does health insurance cover car accident injuries?
There are two specific circumstances where health insurance cover cars accident injuries and an accident victim’s medical care and treatment. They involve:
- Coordinated No-Fault benefits – When the car accident victim “coordinated” his or her No-Fault coverage and health insurance coverage so that, in return for a lesser premium, health insurance will pay first after a car accident. No-Fault will pay only after the health insurance had been exhausted.
- Excess medical bills – When the victim’s accident-related medical bills exceed the No-Fault PIP medical benefits level in the auto insurance policy through which the accident victim is seeking benefits and the victim has health insurance that will provide coverage.
Who pays first auto insurance or health insurance?
Whether auto insurance or health insurance pays first for car accident-related medical bills depends on what type of coverage you have. If you have “uncoordinated” auto No-Fault coverage, then auto insurance will pay first. If you have “coordinated” coverage, then health insurance will pay first.
How does health insurance work with coordinated No-Fault coverage?
As mentioned above, if a driver coordinates No-Fault auto insurance coverage with his or her health insurance, then the health insurance will be considered the “primary” payer and, thus, will be the first to pay for any of the driver’s car accident-related medical care and treatment in the event the driver is injured in a car accident.
With coordinated coverage, No-Fault would step in as the “secondary payer” to pay for accident-related medical bills if the health insurance coverage for car accident injuries had been exhausted and/or the services or treatment in question are not covered by health insurance.
There is one important exception to this general rule in which a driver cannot coordinate his or her health and No-Fault coverage: If the health insurance plan is a self-funded ERISA plan. Specifically, there will be no coordination between a self-funded ERISA health insurance plan and No-Fault coverage if:
- A driver’s health insurance is provided by his or her employer;
- The employer’s health insurance plan is a self-funded ERISA plan (i.e., a plan organized in accordance with the federal Employee Retirement Income Security Act); and
- The employer’s self-funded ERISA plan contains an unambiguous coordination of benefits clause that clearly states that the plan will not be “primary” for an employee’s car accident-related medical expenses
How does health insurance work with No-Fault coverage levels?
The extent to which health insurance will cover car accident injuries by paying for a crash victim’s medical bills will depend on the No-Fault PIP medical benefits coverage level in the auto insurance policy through which the victim will be claiming No-Fault benefits.
Starting with policies issued or renewed after July 1, 2020, drivers can choose one of the following medical coverage levels: (1) Unlimited; (2) $250,000; (3) $500,000; or (4) $50,000 for drivers enrolled in Medicaid. (MCL 500.3107c(1))
When a crash victim’s medical bills exceed either the $250,000 or $500,000 coverage levels, then he or she could turn to his or her health insurance plan to cover car accident injuries in excess of the coverage levels.
Significantly, it’s unlikely that health insurance would play any role in circumstances where the No-Fault PIP medical benefits coverage levels were either unlimited or $50,000 for Medicaid recipients:
- Unlimited – If the coverage level in the relevant policy provides unlimited No-Fault PIP medical benefits coverage, then No-Fault would cover all of the medical care and treatment that is “reasonably necessary” for a car accident victim’s care, recovery or rehabilitation. However, if the policy with the unlimited coverage was coordinated, then health insurance would be the primary payer.
- $50,000/Medicaid – If a person opts for the $50,000 coverage level because he or she is enrolled in Medicaid, then it’s unlikely the person has private health insurance. However, if by some quirk a person does have private health insurance, then he or she would likely need to rely exclusively on the health insurance for coverage because under the federal Medicaid “Secondary Payer” rule Medicaid will not pay for car accident-related medical care if private health insurance has the “legal liability” to do so. (See 42 U.S.C. 1396a(a)(25)(A))
When might health insurance not cover car accident injuries?
Drivers and crash victims must be aware of the significant circumstances under which they will not be able to rely on health insurance to cover their car accident injuries:
- Auto accident exclusions – Many health insurance plans have “auto accident exclusions” which are provisions that specifically exclude coverage (i.e., refuse to pay for medical care and treatment) for injuries caused by and related to car accidents. Our attorneys are already seeing an uptick in many more of these “auto exclusions” in health insurance policies and the new auto law hasn’t even taken effect yet – PIP cap levels won’t be available in Michigan until after July 1, 2020. Employers who provide health insurance for employees will try to avoid higher health insurance costs by adding these auto exclusions to health insurance policies. The game of musical chairs continues: politicians decided to try to save the auto insurance companies money by shifting costs onto health insurance to pay for medical care over the PIP cap coverage levels for Michiganders, and now employers and private health insurers are adding auto accident exclusion language to avoid being on the hook when PIP is exhausted.
- Secondary payer provisions – These “secondary payer” clauses in the health insurance plan ensure that the health plan will pay only on a “secondary” basis and only after No-Fault auto insurance has paid first.
- Coverage limitations/exclusions – Many health insurance plans have coverage limitations and/or exclusions that prevent them from covering vital medical services and treatment for car accident injuries that are regularly covered by No-Fault.
- Loss of job – If a car accident victim’s health insurance is provided by his or her employer and if the victim’s accident-related injuries prevent him or her from returning to work, then if he or she loses his or her job, his or her health insurance coverage will be terminated.
- ERISA liens – Okay, these won’t exactly prevent health insurance from covering car accident injuries. But it will have the same effect for the car accident victim. In the rare instance where an ERISA plan accidentally pays for a car accident victim’s medical care and treatment, the plan administrators will use ERISA liens to force the car accident victim to use any third-party tort recoveries for pain and suffering compensation, excess medical bills and/or other economics damages to reimburse the ERISA for any money it paid out in medical care.
Does health insurance cover car accident injuries the same as No-Fault?
No health insurance does not cover car accident injuries the same as No-Fault insurance. Subject to the No-Fault PIP medical benefits coverage levels, No-Fault insurance covers all medical care, medical treatment and medical services that are “reasonably necessary” to a car accident victim’s care, recovery or rehabilitation. (MCL 500.3107(1)(a))
This means that health insurance and auto No-Fault are definitely not the same. In regards to health insurance covering car accident injuries, it fails to cover many of the necessary medical treatments and services that No-Fault readily covers for people who desperately need certain types of medical care.
These limited and/or excluded medical treatments and services under health insurance often include:
- Residential care
- Attendant care by an agency
- In-home attendant care (24/7 is frequently prescribed for many TBI and SCI survivors)
- Rehabilitation services
- Case management
- Door-to-door medical transportation
- Home purchases/modifications
- Vehicle purchases/modifications
- Long-term speech and cognitive therapy
What does health insurance do that No-Fault doesn’t?
There are two very significant things that health insurance does that auto No-Fault insurance currently does not do:
- Managed care – While the new auto law does include a managed care option at a reduced premium for drivers, many health insurance plans are actually essentially managed care plans. This means that a car accident victim would no longer have the right to choose his or her own doctors and would be prohibited from undergoing any prescribed treatment, procedure or surgery unless and until he or she has received written “pre-authorization” from the health insurance company. Our auto accident attorneys strongly advise against selecting the managed care option for your auto No-Fault policy.
- Added Costs – When health insurance does cover car accident injuries it often involves significant added costs not imposed by your auto No-Fault insurance. These added costs include deductibles, copays, coinsurance, penalties for choosing to seek care from an out-of-network doctor costs and other out-of-pocket payment requirements.
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