Metro Detroit Car Accident Lawyer
Coordinated vs Uncoordinated Coverage
The Michigan No-Fault Act allows your insurance carrier to sell two types of no-fault coverage: full medical coverage and coordinated or excess coverage. If you have full medical coverage or “uncoordinated benefits” the no-fault insurance company is responsible for paying no-fault benefits (like your hospital and medical bills) even though you may have a health insurance policy that would provide the same or similar benefits.
On the other hand, if you have coordinated or excess coverage in your policy, you must use your health insurance first for medical expenses as a result of an auto accident. Your no-fault insurer is then responsible for paying for care that is not covered or that is in excess of the health insurance coverage.
In exchange for your health insurance paying first or being “primary”, you receive a reduction in your auto insurance premium. Purchasing a coordinated policy still provides benefits to the named insured, his or her spouse, and any relative residing in the insured’s household. In fact, you may not even realize that you have purchased coordinated coverage until you examine your auto insurance policy.
Potential Problems With Coordinated Coverage
If you have a coordinated or excess policy, you should be aware that many health insurance policies include language to avoid paying for medical expenses resulting from motor vehicle accidents if there is no-fault coverage. Others have a coordination provision that states that the health insurer is not responsible for no-fault benefits if there is a full no-fault policy. You should check with your health insurance provider to verify that they will cover benefits related to a car accident before electing to coordinate your benefits.
Additionally, if your health insurance is a self-funded ERISA plan, you should avoid purchasing a coordinated/excess policy. This type of health insurance plan can claim a federal lien against your third-party auto negligence case against the at-fault driver for pain and suffering.
Lastly, Medicare and Medicaid do not allow coordination with first-party benefits. Medicaid and Medicare are called payers of last resort and can penalize you for using Medicare or Medicaid instead of your no-fault insurance for treatment as a result of a car accident.