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Insurance Advice: When Michigan Drivers Should Choose Primary Medical PIP Benefits

Insurance attorney advises on why primary medical No-Fault can protect drivers

As a personal injury attorney handling insurance and No-Fault litigation, I read a lot of insurance policies. I continually see many situations where it’s beneficial for people to use medical benefits from their auto insurance. Another term for this is primary medical PIP (personal injury protection benefits). Even though it may be a little more expensive, the positives far outweigh the slightly higher costs.

Here are a few examples of when people are better off with primary medical PIP insurance benefits:

1. Auto Accident Exclusions.
If you have any type of auto accident exclusion in your health insurance policy, you should elect primary medical on your auto No-Fault insurance. To find out whether you have an auto exclusion, you should contact your health insurer and request a copy of the “summary plan description” or the plan itself. Review this with your insurance agent as well. Here’s some info on how to read your auto insurance policy.

2. Beware of ERISA plans.
If your health insurance is a self-funded ERISA plan, you should elect primary medical on your auto No-Fault insurance. These plans can claim a federal lien against your auto accident negligence case (your case for pain and suffering after a car accident). Keep in mind, this area of law is continually changing and is being strongly contested between personal injury lawyers and consumer justice organizations on the one hand, and lawyers representing the ERISA plans on the other. The best way to avoid the problem is to elect primary medical on your auto No-Fault insurance.

To find out whether your health plan is a self-funded ERISA plan, you should contact your health insurer and request a copy of the “summary plan description” or the actual plan. This will help verify and determine your responsibilities with regard to reimbursement and substitution.

Again, there are too many exceptions here to list. For example, any self-funded ERISA plan through a church or government entity (i.e. school system, state or federal government employer, etc.) is exempt from these liens. Therefore, if you work for one of these entities, you can still have coordinated medical on your auto insurance as of today’s date. Unfortunately, since no one has a crystal ball to know when they or a family member may be catastrophically injured in a car accident, and since this is also in theory, subject to change, I would still advise electing to purchase primary medical on your auto No-Fault insurance.

3. If you have an HMO.
HMOs can be very restrictive and can often result in delayed medical treatment. By electing primary medical PIP, you do not have to treat within the HMO and can substantially expedite your treatment and improve your choice of providers.

4. Important Warning about Medicare and Medicaid if you are injured in a car accident and have Michigan No-Fault insurance:
If you have Medicare, Medicaid, Veterans Administration Benefits or any county health plan, you should have primary medical PIP on your auto No-Fault insurance. This helps to avoid the “super liens” that providers of government benefits may otherwise have against your automobile negligence case (the case for your personal injuries and pain and suffering that you would bring against the person who has caused your accident).

5. Blue Cross Blue Shield.
Be aware that there is the possibility of a “double dip” if you have traditional Blue Cross and full coverage on your No-Fault insurance policy. For this reason alone, anyone with Blue Cross Blue Shield should have primary No-Fault auto insurance as well.

To wrap up what is an extremely important but unfortunately also highly technical and confusing area of law that’s littered with exclusions, liens, super liens and conflicting clauses, this is what I tell my clients: If you have health insurance (other than Medicare or Medicaid) and you want to save money on your auto insurance, you have the option in Michigan to buy coordinated/excess medical PIP coverage. This coordinated policy puts your health insurance in a primary position to your car insurance for auto accident-related medical expenses. Most insurers today already default to coordinated/excess medical, but some agents never ask if you already have health insurance.

HOWEVER, if you lose your health insurance for any reason, or you have a situation as noted above, you should immediately contact your auto insurer and change to primary medical coverage.

– This blog post was written by Jeffrey A. Bussell. Jeff is an attorney in Michigan Auto Law’s pre-litigation, where he works closely with auto accident victims in the early stages of their lawsuits, helping them recover important insurance benefits making certain they receive whatever medical treatment is necessary for a full recovery.

– Photo courtesy of Creative Commons, by Kyle May

Related information:

Dealing with your Insurance Company

Uninsured Motorist Coverage: A Must Have

Michigan Attorney Video: No-Fault Medical Benefits

Michigan Auto Law is the largest law firm exclusively handling car accident, truck accident, motorcycle accident and bus cases throughout the state. Call (800) 777-0028 if you’ve been injured in an auto accident, and would like to speak to a lawyer.

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