There is no VA benefits opt out for drivers under Michigan’s auto No-Fault insurance law. Also, because VA benefits do not cover all medical costs related to a car accident, other No-Fault coverages are “unavailable” under the auto law to drivers whose main or only source of health care is VA benefits.
There is a lot of understandable confusion about the provisions in Michigan’s auto No-Fault law that allow for “opting out,” i.e., letting drivers who have their own sources of health care coverage to spend less money on auto insurance by “opting out” or dropping presumably duplicative medical coverage from their own auto No-Fault insurance policies.
As a car accident and auto No-Fault lawyer, I’ve written a lot about this issue on this blog, and today we’re going to explore VA benefits and why people who have VA benefits cannot opt out under Michigan’s new auto law.
No VA benefits opt out under Michigan No-Fault law
Michigan’s auto No-Fault law does not contain a VA benefits opt out for drivers who receive their health care through the U.S. Department of Veterans Administration (VA). Although the No-Fault law specifically allows drivers with Medicare to opt-out of No-Fault medical coverage, it does not include a similar, specific opt-out for drivers covered by VA benefits.
VA benefits do not cover car accident-related medical care
In Bulletin 2023-17-INS, Michigan’s Insurance Commissioner stated that enrollment in Veterans Administration (VA) benefits does not qualify as the “qualified health coverage” that is required by Michigan’s auto No-Fault law because VA benefits “excludes or limits coverage for injuries related to motor vehicle accidents.”
The Bulletin explained that only under very limited circumstances would VA benefits reimburse a veteran for “emergency care in a non-VA facility, even when veterans who are injured in a motor vehicle accident need emergency care in such a facility. As a result, not all enrolled veterans would be eligible for reimbursement for automobile injury related care provided by a non-VA facility.”
The Insurance Commissioner concluded that “[b]ecause of this limitation on reimbursement for care related to motor vehicle accidents, VA enrollment does not qualify as QHC.”
No-Fault, VA benefits and qualified health coverage
Because VA benefits do not qualify as “qualified health coverage” for purpose of the No-Fault law, drivers who depend on VA benefits for their health care may be ineligible or they may render their family members ineligible for certain No-Fault medical coverage levels:
- $50,000 medical coverage level for drivers on Medicaid: This will be unavailable if the driver’s spouse or family member who lives in the home depends exclusively on VA benefits for health care. (MCL 500.3107c(1)(a); 500.2111f(2)(a))
- Medicare opt-out: This option would be unavailable to a driver whose spouse or family member who lived in the home had only VA benefits as a source of health care. (MCL 500.3107d(1); 500.2111f(3))
- $250,000 coverage level with “qualified health coverage” exclusion: This little-talked-about coverage option involves a driver who has “qualified health coverage” choosing a No-Fault PIP medical benefits coverage level of $250,000, but agreeing to be excluded from all No-Fault medical coverage in return for a 100% reduction in the No-Fault portion of his or her auto insurance premium. (MCL 500.3109a(2)) Additionally, the driver’s spouse and/or family member who lives in the home must have “qualified health coverage.” Consequently, this option is unavailable if the only source of health care available to a driver and/or his or her spouse or family is VA benefits.
TRICARE is ‘Qualified Health Coverage’ under No-Fault
In Bulletin 2023-17-INS, Michigan’s Insurance Commissioner stated that TRICARE, which is health care coverage provided to military families and their dependents through the U.S. Defense Health Agency, “is insurance and qualifies as QHC” for purposes of No-Fault auto insurance.
QHC stands for “qualified health coverage” which describes the type of health insurance coverage that Michigan drivers must have in order to qualify for certain levels of No-Fault auto insurance.
The Commissioner concluded that TRICARE qualified as QHC because “it does not exclude coverage for motor vehicle accidents and all TRICARE policies have a deductible of less than the applicable maximum.”
As a result of the Bulletin, drivers who have TRICARE may select certain No-Fault coverage levels that are unavailable to drivers who depend on VA benefits for their health care:
- $50,000 coverage level for drivers on Medicaid
- Medicare opt-out
- $250,000 coverage level with “qualified health coverage” exclusion
The Bulletin also noted that “Auto insurers should rely on [“Department of Defense (DoD) documentation to demonstrate proof of TRICARE coverage for purposes of purchasing no-fault coverage”] as proof of QHC.”
Although the Bulletin concluded that TRICARE does not “exclude” coverage for car accident-related medical care, it did not state that TRICARE does not “limit” coverage for motor vehicle accidents. Under Michigan’s No-Fault law, “health or accident coverage” qualifies as “qualified health coverage” only if the “coverage does not exclude or limit coverage for injuries related to motor vehicle accidents” and “[a]ny annual deductible for the coverage” does not exceed a certain amount. (MCL 500.3107d(7)(b)(i)(A)[exclude or limit] and (B) [deductible])
CHAMPVA is ‘Qualified Health Coverage’ under No-Fault
In Bulletin 2023-17-INS, Michigan’s Insurance Commissioner stated that CHAMPVA, which provides health care benefits to military families and their dependents, “is insurance and qualifies as QHC” for purposes of No-Fault auto insurance “because CHAMPVA does not exclude or limit coverage for motor vehicle accidents and all CHAMPVA polices have a deductible of equal to or less than the applicable deductible maximum per individual.”
As a result of the Bulletin, drivers who have CHAMPVA may select certain No-Fault coverage levels that are unavailable to drivers who depend on VA benefits for their health care:
- $50,000 coverage level for drivers on Medicaid
- Medicare opt-out
- $250,000 coverage level with qualified health coverage exclusion
The Bulletin also noted that “CHAMPVA-covered individuals may present their CHAMPVA identification cards as proof of QHC. Auto insurers should rely on such documentation as proof of QHC.”
Injured in a car accident? Call Michigan Auto Law
If you are a veteran who was injured in a car accident in Michigan and need help, you can call toll free (800) 968-1001 for a free consultation. You can also get help from an experienced Michigan car accident attorney by visiting our contact page or you can use the chat feature on our Michigan Auto Law website.
