Court Opinion

ID: 9692607
Source: CourtListenerOpinion
Date Created: 2023-08-25 15:58:40.527295+00
Date Added: 2024-06-11T18:19:35.650040
License: Public Domain

Murphy, P.J.
(dissenting). I dissent. This case brings to light an interesting issue regarding the meaning of an insured’s options under the state’s no-fault act.
Our Supreme Court in Federal Kemper Ins Co, Inc v Health Ins Administration, Inc, 424 Mich 537; 383 NW2d 590 (1986), held that, where the coordinated benefits provisions of a health insurance policy and a no-fault automobile policy conflict, the health insurer is primarily liable for the payment of medical expenses incurred by the insured. Id., p 551. The Court emphasized that this result is consistent with the Legislative scheme of vesting in the insureds, rather than the insurers, the option of coordinating benefits. Id., pp 551-552. That option expressly includes an insured paying a lower premium for coordinated medical benefits coverage. See MCL 500.3109a; MSA 24.13109(1). Moreover, the Supreme Court expressed no view whatsoever as to what the result would be when the insured does not elect coordinated no-fault *59benefits and, as a result, the no-fault premium is not correspondingly reduced. Federal Kemper, supra, p 552, n 10.
In my view, the majority’s holding totally vitiates the legislatively mandated option provided to insureds in § 3109a of the no-fault act. I find it inconsistent with the legislative scheme that the insured in this case, who is covered by a coordinated benefits health policy, gets absolutely nothing in return for the higher premiums paid to her no-fault automobile insurers. Under the majority opinion, since a health and accident insurer is allowed without qualification or condition to coordinate its benefits with no-fault automobile insurance, the insured has nothing to gain by electing a noncoordinated automobile insurance policy. This result effectively destroys the election that the Legislature provided to those who own a motor vehicle, who by law are required to obtain insurance affording personal injury protection and other benefits. See MCL 500.3101; MSA 24.13101.
It is true that plaintiff received payment for her medical expenses from her no-fault carriers. However, she could have realized the same benefits had she not opted to pay the higher premium. If plaintiff had been covered by the less expensive coordinated no-fault benefits option, under the mandate of Federal Kemper, her health insurer would have been primarily liable for her medical expenses and her no-fault carriers would have picked up any gaps in the health insurer’s coverage. See, e.g., West Michigan Health Care Network v Transamerica Ins Corp of America, 167 Mich App 218, 228; 421 NW2d 638 (1988). Plaintiff, then, gets absolutely nothing for the additional premium dollars paid to her no-fault insurers.
I do not believe that this result is a matter of a consumer making a bad choice when deciding not *60to coordinate her medical benefits coverage under the no-fault policy. Rather, the insured’s option, granted by the Legislature in § 3109a, has been rendered a nullity. What possible good is there in vesting the insured with a choice under § 3109a when that choice is made meaningless in situations where the insured is also covered by a coordinated health insurance plan?
Our Supreme Court in Federal Kemper in addressing the consumer’s option to select or reject deductibles based on his existing nonautomotive health and accident coverage stated the following:
Recently, the Court of Appeals decided Auto Club Ins Ass’n v Frederick & Herrud, Inc, 145 Mich App 722; 377 NW2d 902 (1985), a case similar to the instant case. There, despite a clearly stated attempt by the health insurer to evade primary liability, the Court discerned the legislative intent that no-fault coverage would be secondary, and, therefore, deemed the health insurance primary. We are persuaded that a similar analysis and result is proper in the instant case.
Defendant [health insurer] urges that the objectives of eliminating duplicative recovery and containing insurance costs would also be served by giving effect to its coordination of benefits clause, thereby making its coverage secondary and plaintiff’s [no-fault insurance carrier] primary.
However, we note that the health insurer in Frederick & Herrud made a similar argument, which was rejected by the Court. Section 3109a requires "prior approval by the commissioner” of "[t]he deductibles and exclusions” offered by no-fault carriers. By contrast, defendant, like the health insurer in Frederick & Herrud, points to no evidence on the record that the Insurance Commissioner has approved its coordinated benefits coverage. The Frederick & Herrud panel continued:
"There is further no evidence that defendant’s *61coordination-of-benefits clause was offered in such a way as to foster consumer savings, a major goal of § 3109a, ... or as to how premiums or employee co-pay were affected by this clause to insure that defendant is not reaping unearned premiums. That is, because no-fault is mandatory and coordination of benefits must be offered at a reduced rate, the insured gains an advantage from such a clause by the required reduction in premium while the insurer’s reduced profits reflect a corresponding reduction in its potential liability. No such check necessarily applies to health and accident insurance. It would not be difficult to simply insert a coordination-of-benefits clause in a health and accident policy without a corresponding reduction in premium or co-pay where the determination of primary liability is covered by the policy language. [Id., p 733. Emphasis in original.]”
Similarly, other than defendant’s conclusory statement that by offering coordination of heneffts it "is able to offer reduced premiums,” there is no record evidence that its coordinated beneñts coverage is offered at lower rates. [Federal Kemper, supra, pp 545-546, 549-500. Emphasis added.]
Similarly, in this case it is clear that no evidence was presented to support a conclusion that plaintiffs employer paid a lower premium because its group health policy provided coordinated benefits. From this record it cannot be determined whether defendant simply inserted the coordination-of-benefits clause in its contract with plaintiffs employer without a corresponding reduction in the premium charged.
I recognize that our Supreme Court in Federal Kemper also noted that other purposes of § 3109a include containing both auto insurance costs and health care costs, and eliminating duplicative recovery. Id., p 551. However, as long as an insured is paying a higher premium, there should be some corresponding return to the insured for paying *62that premium. Under the facts of this case, why shouldn’t the appropriate return to the insured for the payment of that higher premium be allowing plaintiff to recover benefits from both insurers? After all, it is undisputed that premiums were paid to both the no-fault and health insurers. Absent some return to plaintiff for the additional premiums which were paid to the no-fault insurers, plaintiff has done nothing other than subsidize her health insurer. See Haefele v Meijer, Inc, 165 Mich App 485, 499; 418 NW2d 900 (1987). At the very least, proofs should be presented to establish that a lower premium was charged by the health insurer so that the legislative option under § 3109a is not rendered a nullity.
Therefore, in consideration of the foregoing, I simply am not prepared on the facts of this record to support a resolution by summary disposition. I would reverse the lower court’s order granting defendant’s motion for summary disposition.