In the matter of American Physio, LLC v State Farm, docket number 367918, Chris Endres of Anselmi, Mierzejewski, Ruth & Sowle, successfully argued in the Michigan Court of Appeals that an assigned claims insurer is not responsible for no-fault benefits when someone completely opts out of medical benefits/allowable expenses under MCL 500.3107d (Medicare/qualified health coverage).
The Court of Appeals held that anyone who could claim benefits under that policy – resident relatives and/or spouse of named insured – are not eligible for allowable expense no-fault benefits. The Court went on to find that the opt out policy is in the order of priority, so the claimant cannot satisfy any of the requirements of MCL 500.3172 and seek allowable expense benefits from an assigned insurer. This preclusion also extends to medical providers.
The statute is written in such a way that there are two potential outcomes when a claimant is a resident relative of an insured who has opted out of PIP/no-fault benefits – either they are subject to the opt out or the opt out was not proper (either the insured or a resident relative does not have qualified health coverage or Medicare). If the opt out was not proper then the policy converts to a full unlimited PIP policy. In either scenario, there is no exposure to the assigned carrier. This preclusion applies to the named insured, a spouse of the named insured, a resident relative of the named insured, and any providers seeking benefits on behalf of the claimant. An opt out policy is considered “personal protection insurance applicable to the injury.” That precludes a claimant from claiming benefits from an assigned carrier. The opt out policy is priority under MCL 500.3114.
There is no obligation for an assigned carrier to pay and then litigate a dispute as to whether the opt out was proper or not. The Court of Appeals also reiterated that diligence is required in ascertaining the appropriate insurer. Nothing in this post shall be construed as legal advice.
If you would like any additional information, please feel free to reach out to Mr. Endres.