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Tax ID numbers not required for payment of Michigan attendant care benefits

December 31, 2012 by Steven M. Gursten

Federal judge rules that neither No-Fault Law nor IRS code justify Allstate’s denial of attendant care payments due to absence of providers’ taxpayer IDs

In recent years, Michigan No-Fault auto insurance companies have shirked their duty to pay attendant care benefits (in-home nursing services) to seriously injured auto accident victims by withholding payment on the basis that the attendant care providers’ taxpayer identification numbers had not been provided to the No-Fault insurer.

Everyone —  including lawyers representing accident victims and lawyers representing the insurance companies who try to avoid paying No-Fault benefits to those victims — knows that the “tax ID numbers” issue is just a ploy by the No-Fault insurers to delay or ultimately avoid paying the attendant care benefits the auto accident victims are rightly entitled.

It’s harassment. Pure and simple. And, it’s been allowed to go on too long. Much too long.

But now the end — and justice — may be in sight, thanks to a recent federal court ruling.

In Bajraszewski v. Allstate Insurance Company, U.S. District Court Judge David M. Lawson of the Eastern District of Michigan, Southern Division, ruled that a Michigan No-Fault auto insurer “may not refuse to pay benefits on the basis that” the auto accident victim claiming reimbursement for “first-party attendant care benefits” has “not furnished the [attendant] care provider’s taxpayer identification number.”

Judge Lawson explained that neither Michigan’s No-Fault Act, nor Michigan case law interpreting the No- Fault Act, nor the Internal Revenue Code require that attendant care providers be paid directly.

Indeed, he noted: “[B]oth Michigan and Federal law allow an insurance company to make payments directly to the insured,” i.e., the auto accident victim.

As such, because attendant care providers need not be paid directly and because the insured auto accident victim can be paid for attendant care benefits. Instead, the No-Fault auto insurer is under no obligation to report the attendant care benefits to the I.R.S. via a Form 1099.

Therefore, Judge Lawson concluded, the taxpayer identification numbers of those providers are not needed by the No Fault auto insurers as a prerequisite to paying for the attendant care services that have been provided.

The only two exceptions to that rule, said the judge, were if:

  • The No-Fault auto insurer has “actual knowledge” that the insured, auto accident victim, who is claiming and receiving attendant care benefits, “does not intend to comply” with federal law requiring that taxes be withheld from payments made by the victim to her or his attendant care provider.
  • The attendant care provider requests direct payment from the No-Fault auto insurer for attendant care benefits provided to the insured, auto accident victim.

Related information:

MSC issues new rules for attendant care compensation

What is attendant care?


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