942 N.W.2d 628
Mich. Ct. App.2019Background
- Christina George was injured in a motor-vehicle crash and had no household no-fault policy; her PIP claim was assigned to Allstate under Michigan’s Assigned Claims Plan (MACP).
- George also had health and wage-disability benefits under an ERISA-governed, self-funded plan administered by Aetna that contains a coordination-of-benefits (COB) / non-duplication clause stating motor-vehicle insurance and programs required by law are primary.
- Michigan law (former MCL 500.3172(2)) reduces assigned-claims PIP payments to the extent benefits covering the same loss are available from other sources (i.e., an assigned-claims insurer gets a set-off), except for Medicare/Medicaid.
- Allstate moved for partial summary disposition arguing the ERISA plan covered the same loss and thus Allstate was entitled to a statutory set-off under MCL 500.3172(2).
- George argued MCL 500.3172(2) is preempted by ERISA; the trial court granted partial summary disposition for Allstate, ruling ERISA preempted the state set-off as applied.
- The Court of Appeals reversed: because the ERISA plan is self-funded and contains an unambiguous COB clause disavowing primacy when a program required by law (like MACP) applies, ERISA preempts the state statute to the extent it would rewrite the plan’s terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MCL 500.3172(2) is preempted by ERISA such that assigned-claims insurer cannot take a set-off against a self-funded ERISA plan | George: ERISA preempts the state set-off; MACP cannot reduce ERISA plan benefits | Allstate: MCL 500.3172(2) supplies coordination of benefits and applies; ERISA does not preempt because state law regulates insurance and/or no conflict exists | Held: ERISA preempts to the extent MCL 500.3172(2) would alter the clear COB terms of a self-funded ERISA plan; Allstate is not entitled to set-off where plan’s unambiguous COB makes the plan primary only when applicable; here plan disavows primacy in favor of programs required by law (like MACP), so ERISA plan’s terms control |
| Whether ERISA plan is self-funded and contains an unambiguous COB clause controlling primacy | George: Plan is self-funded and its COB unambiguously makes motor-vehicle insurance or required-by-law programs primary | Allstate: Disputed applicability; argued plan language requires multiple insurance plans or coverage by an insurer | Held: Court accepted evidence that the plan was self-funded and that plan language unambiguously coordinates with motor-vehicle insurance and programs required by law; thus the plan’s COB governs primacy |
Key Cases Cited
- Auto Club Ins. Ass’n v. Frederick & Herrud, Inc., 443 Mich 358 (state law cannot rewrite unambiguous COB in a self-funded ERISA plan)
- American Med. Sec., Inc. v. Allstate Ins. Co., 235 Mich App 301 (distinguishing insured vs. self-funded ERISA plans for state regulation under saving/deemer clauses)
- FMC Corp. v. Holliday, 498 U.S. 52 (deemer clause exempts self-funded ERISA plans from state insurance regulation)
- Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724 (saving clause preserves state laws that regulate insurance)
- Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504 (state laws that control ERISA plan terms are preempted)
- Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (preemption of state regulation of welfare benefits in ERISA plans)
- Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1 (limitations on what state laws "relate to" ERISA plans)
- Batts v. Titan Ins. Co., 322 Mich App 278 (assigned-claims benefits are coordinated under MCL 500.3172(2))