More than any other question, the one I’ve been now asked the most since the Legislature passed No-Fault reform last Friday is how the new Michigan No-Fault law will affect attendant care beneifts.
How does the new Michigan car insurance law limit attendant care benefits?
The new Michigan car insurance law limits car accident victims’ auto insurance coverage of in-home, family-provided attendant care to only 56 hours per week. While this is the same limitation that applies to people injured in the workplace under Michigan’s Workers’ Compensation law, it is a dramatic change from the previous law that allowed family members to provide 24-hour care for loved ones catastrophically injured in automobile accidents.
Does the 56-hour limitation apply to all types of care?
No. According to the new Michigan car insurance law, the 56-hours-per-week limitation applies only to attendant care provided to a car crash injury victim if the care is provided: (1) in the victim’s home and (2) by a “family member.”
Technically, under the new Michigan car insurance law, the in-home care limitation only applies if the care is provided by an individual who is:
- Related to the victim
- Living in the same household as the victim
- A business or social friend or acquaintance of the victim’s from the time before the victim had suffered car accident-related injuries
The new 56-hours-per-week limitation on in-home care does not apply to commercial agencies who provide attendant care services.
What if a car crash injury victim needs more than 56 hours per week of care?
Interestingly, an accident victim’s family or the accident victim’s No-Fault attorney may be able to negotiate and reach an agreement with the insurance company to continue to pay for family-provided services that would be in excess of the 56-hour limitation.
Specifically, the new Michigan car insurance law provides that an “insurer may contract to pay benefits for attendant care for more than the hourly limitation.”
Why would the insurance company ever agree to pay for more services by family members if the new Michigan car insurance law has a 56-hour limitation? The answer is that family-provided attendant care is often significantly less expensive than the commercial rate charged by agencies. Therefore, it is reasonable to believe many insurance companies and claims adjusters will still contract for family-provided care in excess of 56 hours per week if it can be shown the care is reasonably necessary and thousands of dollars less expensive than commercial attendant care.
Alternatively, the victim may need to seek care through a commercial provider that provides in-home care.
When does the limitation take effect?
Under the new Michigan car insurance law, the 56-hours-per-week limitation applies to in-home, family-provided care that is “rendered after July 1, 2021.”
Does the Medicare-based fee schedule apply under the new Michigan car insurance law?
Under the new Michigan car insurance law, the newly created Medicare-based fee schedule will apply to the charges submitted by the providers of in-home, family-provided attendant care.
Are current recipients “grandfathered in” under the old law or will the new 56-hour limitation apply to them retroactively?
This, along with when the law takes effect, is the question that people have been most concerned with:
Does the new 56-hours-per-week limitation apply to and affect car accident victims who are currently receiving in-home, family-provided care pursuant to No-Fault auto insurance policies that were in existence before the new law was passed?
Unfortunately, this is not specifically addressed by the new Michigan car insurance law. In part, it is because the bill was rushed through the Legislative process and, in part, because it is just very poorly written and remains vague in many crucial areas.
If I had to give my legal opinion right now (and on June 13th, I will be addressing this very question along with other issues as part of a No-Fault law seminar for the Michigan Association for Justice), I would say that the new Michigan car insurance law, as it relates to attendant care, takes effect July 2, 2021. At that time I expect that auto insurance companies will attempt to apply it retroactively, meaning that any catastrophically injured auto accident victim in Michigan who is currently requiring more than 56 hours per week of in-home, family-provided care will see the insurance company on July 2, 2021 insist on only paying for 56 hours of in-home, family-provided attendant care a week.
Ultimately, this will need to get finally resolved through litigation. Trying to apply a law like this retroactively raises legal and constitutional questions that will likely require resolution by the courts. There are many important legal principles that will come into play in determining whether the new limitation applies retroactively or prospectively only to car accident injury victims whose policies were issued after the new law took effect.
Those principles include the following, which were acknowledged and discussed in the Michigan Supreme Court’s 2014 ruling in LaFontaine Saline, Inc., vs. Chrysler Group, LLC (#146722, June 10, 2014):
- To determine whether legislation is intended to apply retroactively, the courts will for “specific language providing for retroactive application.” This language may include the use of the word “retroactive” and/or the inclusion of an explicit instruction that the legislation is intended to apply to pre-existing contracts, i.e., the “amendments to this act that added this section apply to agreements in existence on the effective date of this section.”
- In assessing the potential for retroactive application of legislation, courts will evaluate whether “retroactive laws [take away or] impair vested rights [including existing contract rights] acquired under existing laws.” The courts will also consider whether retroactive application of legislation will “create new obligations or duties [or a new disability] with respect to transactions or considerations already past.”
- Courts recognize and uphold the principle that the laws in existence at the time a contract was created are treated as part of the contract.
