December 19, 2017
Volume XXIX, No. 28

 

INSURER REQUIRED TO PAY PIP BENEFITS FOR VETERAN WITH VA COVERAGE

 By L. Ladd Culbertson

In a published decision, the Michigan Court of Appeals has held that an insurer can not deny or offset claims for PIP benefits for a claimant who was also eligible for health care benefits through the Veterans Administration. In Batts v Titan Ins. Co., ___ Mich App ___ (12/12/17), the military veteran plaintiff was riding a motor scooter, when he struck a vehicle that failed to stop at a stop sign, and was injured. The vehicle involved in that accident could not be identified. Because the plaintiff did not have a policy of Michigan no-fault insurance available to him in his household, he filed a claim for Michigan No-Fault PIP benefits through the Michigan Assigned Claims Plan. His claims were then assigned to defendant Titan Insurance Company.

Titan presented three arguments in favor of their rejection of the plaintiff’s claims, but each was eventually rejected by the Court of Appeals. The first argument was that the plaintiff had health insurance coverage available through the VA, and that under the coordination of benefits provision of MCL 500.3109a, the no-fault insurer was not liable for the costs of any medical treatment which the plaintiff sought outside of the VA system.

The Court of Appeals noted that plaintiff had not purchased either a no-fault policy or a coordinated no-fault insurance policy, however, and concluded that MCL 500.3109a was therefore not applicable. The Court similarly concluded that the requirement that a claimant with a coordinated no-fault policy is required to first seek treatment available through his health plan [1] was also not applicable in this case.

The second argument presented by Titan was that, pursuant to MCL 500.3172(2), benefits through the assigned claims plan are to be coordinated with the benefits the claimant received from other sources, and that such sources included health care benefits available through the VA. The Court rejected this argument as well, relying upon the Supremacy Clause of the United States Constitution, US Const, art VI, cl 2, and federal statute 38 USC §1729 which provides that the United States has the right to recover reasonable charges for care or services provided to a veteran for non-service-related injuries. This specifically includes those services occurring as the result of a motor vehicle accident for which state law requires automobile accident insurance. The federal statute also provides the United States with rights of subrogation against a third-party, and provides that that no law of any state or contract provision may operate to prevent such recovery or collection. Because the United States had a right of subrogation and recovery, therefore, it could not be primary for the payment of benefits.

The third reason provided by Titan for refusing to pay the plaintiff’s PIP claims was an argument that the insurer was entitled to a set-off against federal benefits, including health care benefits through the VA, pursuant to MCL 500.3109(1), which permits the offset of benefits required to be provided under the laws of any state or the federal government. Once again, the Court noted that 38 USC §1729 negated any argument that the VA was liable, and primarily responsible, to provide medical benefits to the plaintiff for his non-service-related motor vehicle accident injuries. Because the United States was entitled to reimbursement for all medical services provided to the plaintiff for his accident-related injuries, Titan was not entitled to a set-off for the medical services provided to the plaintiff by the VA for those injuries.

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[1] Pursuant to Tousignant v Allstate Ins. Co., 444 Mich 301, 303; 506 NW 2d 844 (1993).

Ladd is a Shareholder in our Grand Rapids Office.He can be reached at (616) 742-5500 or lculbertson@garanlucow.com.

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This is a complimentary full day active participation Mock Trial of a PIP case for our clients. Space is limited.

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