VA Benefits Opt Out Not Allowed Under Michigan No-Fault Law
Veterans Affairs (VA) health benefits cannot be used to opt out of Michigan No-Fault PIP medical coverage because the Department of Insurance and Financial Services (DIFS) has determined that Veteran Affairs coverage is not considered Qualified Health Coverage (QHC) under state law. DIFS concluded that VA benefits exclude or limit coverage for motor vehicle accident injuries in certain circumstances, which prevents the coverage from meeting Michigan’s QHC requirements. As a result, individuals who rely solely on VA health benefits are not eligible to waive or reduce their PIP medical coverage based on those benefits alone.
There is confusion about Michigan No-Fault “opt-out” provisions, which may allow drivers with qualifying health coverage, such as VA benefits, to reduce premiums by excluding overlapping medical coverage from their auto insurance policy.
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.
Key Takeaways: Michigan Auto Insurance (PIP) Opt-Outs
- Medicare Exception: If you are enrolled in both Medicare Parts A and B, you are allowed to completely opt out of the PIP medical portion of your auto insurance policy.
- Other Health Insurance: If you have traditional, comprehensive health coverage (such as a spouse’s employer plan or an individual policy) that covers auto accident injuries, you can use that as proof of QHC to adjust or exclude your PIP medical coverage.
- TRICARE/CHAMPVA: Unlike standard VA benefits, individuals covered under TRICARE or CHAMPVA can use their military benefits to qualify for the QHC opt-out or exclusion.
- Policy Review: You can verify your exact options or submit your qualifying health plan to your agent using the Information for Insurance Agents – State of Michigan guidance.
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 “Qualified Health Coverage (QHC)” for purposes of Michigan No-Fault auto insurance opt-out provisions because VA benefits exclude or limit coverage for injuries related to motor vehicle accidents, and therefore cannot be used to satisfy the QHC requirement for opting out of certain Michigan No-Fault medical coverage options.
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 VA benefits opt out under Michigan No-Fault insurance is not available based on VA health coverage alone, and confirmed that TRICARE—a health care program for military families and dependents administered through the U.S. Defense Health Agency—qualifies as “Qualified Health Coverage (QHC)” for purposes of Michigan No-Fault auto insurance because it is considered insurance that meets QHC requirements.
Michigan’s Department of Insurance and Financial Services (DIFS) distinguishes TRICARE from VA health benefits in this context, treating TRICARE as qualifying coverage under the No-Fault opt-out framework while VA benefits alone do not meet the requirements.
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 addressed VA benefits, CHAMPVA, and Michigan No-Fault auto insurance opt-out rules, stating that CHAMPVA qualifies as “Qualified Health Coverage (QHC)” for purposes of Michigan No-Fault insurance because CHAMPVA, which provides health care benefits to military families and dependents, does not exclude or limit coverage for motor vehicle accident injuries and includes deductibles that meet applicable maximum requirements.
The Department of Insurance and Financial Services (DIFS) confirmed that CHAMPVA meets Michigan’s QHC standards under the No-Fault framework and may be used in the opt-out analysis based on its coverage structure and deductible requirements.
As a result, drivers with CHAMPVA may qualify for Michigan No-Fault coverage options that are not available to drivers relying solely on VA health benefits, including:
- $50,000 PIP medical coverage level for drivers enrolled in Medicaid
- Medicare-related opt-out provisions
- $250,000 PIP medical coverage level with a qualified health coverage exclusion
The Bulletin also noted that CHAMPVA-covered individuals may satisfy Michigan’s Qualified Health Coverage requirements when determining eligibility for reduced No-Fault medical coverage options under the opt-out framework.d individuals may present their CHAMPVA identification cards as proof of QHC. Auto insurers should rely on such documentation as proof of QHC.”
Are you a veteran who was injured in a car accident and have questions about how your VA benefits affect your No-Fault claim—or whether you can opt out? Call the attorneys at Michigan Auto Law now for a free consultation!
If you’re a veteran injured in a car accident in Michigan and have questions about how your VA benefits affect your No-Fault claim—or whether you can opt out—call now at (800) 968-1001 for a free consultation with an experienced auto accident attorney. There is no cost or obligation. You can also visit our contact page or use the chat feature on our website.
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Written By
Steve M. Gursten,
Attorney,
License#: P53632
Steven Gursten, attorney at Michigan Auto Law and one of the most successful auto accident attorneys in Michigan. Michigan Auto Law represents people seriously injured in car, truck, motorcycle, and bus accidents, including catastrophic injury, traumatic brain injury, and No-Fault insurance cases. Steven has recovered the largest reported auto and truck accident settlement of any Michigan lawyer, and has been named Michigan Lawyer of the Year and a Top 50 Michigan Super Lawyer.
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