*1
Co
Citizens
OF AMERICA
INSURANCE COMPANY
PROFIT v CITIZENS
1).
15,1992 (Calendar
Argued
No. Decided
No.
Docket
90904.
October
29,
September
1993.
George
Profit,
guardian
of the estate of
Gail
as
and conservator
Jr.,
person, brought
incompetent
Yancey,
legally
action in
a
an
Company
against
Wayne
Circuit Court
Citizens Insurance
insurer,
America,
claiming
Yancey’s
no-fault
with
accident
his
loss benefits were not coordinated
other
work
security
they
by
coverage,
his
should not be reduced
social
Jourdan,
court,
J.,
Phillip
granted
disability
benefits. The
finding
disposition
plaintiff,
summary
work loss
for the
by
security
not
benefits should
be reduced
social
Sawyer
P.J.,
Appeals,
Griffin,
and
and
benefits. The Court of
120094).
(Docket
JJ.,
ap-
The insurer
Brennan,
affirmed
No.
peals.
by
by
opinion
joined
Levin,
Justice
an
Justice
Chief
Malaett,
Supreme
Cavanagh,
and
Justices Griffin and
Court held:
should be subtracted
an automo-
Social
benefits
payable for
from the
otherwise
bile no-fault insurer
amount
specifically pro-
work
even where the
of insurance
loss
coverage
and
the work loss benefit
other accident
vides that
higher premium than
and the insured
coordinated
opportunity
for
have been
had
coordination
and
been offered
elected.
liability
1.
act
Section
of the no-fault automobile
govern-
provides
or the federal
that benefits
payable for
ment shall be subtracted
no-fault
requires
expense
loss.
3109a
and work
Section
rates,
premium
and
to offer at
deductibles
insurers
reduced
health
accident
on
exclusions related to other
insured.
security disability
part of a
2.
as
Social
References
2d,
Security and Medi-
Am Jur
Automobile Insurance
Social
care 1218.
plans providing
Validity
for
construction of no-fault insurance
payable by amounts receivable
of benefits otherwise
reduction
from
independent
ALR4th 996.
sources. 10
collateral
Amici Curiae: (by G. Gross and James & Nemeth Gross Nemeth) Mary Associ- for Auto Club Insurance T. Michigan Insurance Com- Association of ation and panies. *3 Young, (by Dykema, S. Kathleen Donald Gossett Torbert) for Michi- Lewis, and Ronald McCree gan Catastrophic Claims Association. liability act automobile J. The no-fault Levin,
provides, Code, that § of the Insurance govern- provided by or the federal from no-fault benefits benefits be subtracted” ment "shall expense payable loss.1 The and work for medical provides, in- § 3109a, a no-fault also act surer mium pre- appropriately offer, reduced shall related rates, and exclusions deductibles 24.13109(1) part: 500.3109(1); provides in MSA MCL under the laws Benefits government shall be subtracted federal of state or the payable personal protection otherwise insurance benefits injury. for the for protection include benefits medical insurance benefits Personal 24.13107). (MCL 500.3107; MSA expense loss and work 444 Opinion of the Court coverage” in- and accident other "health sured.2 by policy Citizens issued no-fault insurance A of George Yancey, Company America to of Insurance pre- coordination, at a reduced Jr., expense benefits with mium, of no-fault Yancey, did not but "other health provide loss bene- of no-fault work for coordination coverage” Yancey. "other accident fits with injured seriously Yancey in an automobile paid loss benefits less so- work benefits. accident. Citizens cial cey’s disability security Profit, Yan- Gail against guardian, this action commenced Yancey claiming that, did not Citizens elect to accident duced the work disability benefits with other coordinate work loss coverage, have re- should not Citizens security
loss benefits government. presented question secu- is whether social disability rity an are to be subtracted other- from the amount no-fault insurer automobile where the for work loss wise insurance provides specifically the work loss coordi- are not and other accident higher pre- paid a nated, the insured and thus payable had he been would have been mium than opportunity had elected to coordi- offered bene- hold that social nate. We fits should be subtracted.
i judge contends, and the the circuit *4 24.13109(1) part: 500.3109a; provides in MSA MCL protection providing personal insurance benefits An insurer rates, offer, premium appropriately deductibles reduced shall and exclusions reasonably and accident related to other health coverage on the insured. Co Citizens Ins Court agreed, Appeals loss benefits that work Court security disability by reduced not be should Appeals it while said that Court of The benefits. strong per- "arguments to Citizens’ found rejected position in LeBlanc suasive,” was Citizens’ Co, 410 Mich Automobile Ins Mutual v State Farm (1981), v Govern- and Tatum 301 NW2d Employees 663; 431 NW2d ment (1988). "reluctantly” Appeals The Court of followed Tatum.3 in- no-fault LeBlanc, held that a this Court
In Medicare benefits not subtract surer could expense in- where medical benefits no-fault medical ex- to coordinate had not elected sured pense coverage.” Tatum, In "other health with paid by the fed- that medical benefits Court held government the armed member of to or for a eral injuries acci- in an automobile suffered forces insurer from could not be subtracted dent expense in- benefits where medical no-fault medi- not elected coordinate sured had coverage.” expense health with "other cal ii ask that LeBlanc and amici curiae Citizens overruled. Tatum be operative Congress effect of eliminated
The secondary enacting that Medicare LeBlanc coverage under such insurance where automobile insurance on LeBlanc. nevertheless, Tatum, relied is available.4 LeBlanc, Tatum, the insured like no- to coordinate and did not elect not offered was expense other health with fault coverage. _ (1991). 55, 61-62; App 466 NW2d 3 187 Mich 1980, 42 1395b. Budget USC Act of Reconciliation See Omnibus legislation in LeBlanc. not in issue *5 Opinion op the Court
A very Citizens that this Court agree may We with in LeBlanc5 in equating well have erred a a of insurance written provided policy by under Blue Cross-Blue Shield of private insurer such as coverage,” health Michigan, paradigm "other federal provided mandatory with benefits under (Medicare), program generally provid- entitlement benefits to all persons over ing sixty-five, largely levied on all It wage taxes earners. by follow that Tatum should now not, however, does be overruled.
B Tatum, Court the benefits observed military coverage under medical issued provided by "similar” to those bcbsm, and that bcbsm "when through one’s employer, parallel can that which is the fed military personnel by active added.) . . .”6 This government. (Emphasis eral Court continued: perceive concluding
We can no rational basis for benefits, military essentially that serve the same and Medicare dent medical which purpose as Blue Cross-Blue Shield benefits, are not "health and acci 3109a.[7] meaning within the of § There is no need the instant case to recon- Tatum, appropriate nor would it be to do so: sider however, not, rights injured overrule LeBlanc. The We do insurers, obligations persons, legislation that were not affected and the footnote, preceding to in are not affected referred today’s decision.
6 Id., p 670. 7Id. Ins Co v Citizens Opinion of the Court (cid:127)
Social not "serve same do purpose and Med- Shield as Blue Cross-Blue benefits;”8 icare employee
Yancey (cid:127) was not an
government; part in, (cid:127) forth For reasons set *6 pro- disability security benefits are benefits law, within the mean- vided under federal 3109(1), ing not "other health and are meaning within and accident §of 3109a.
III security The does not indicate that social record to those are "similar”9 benefits by private policies insurers insurance issued generally provide accident who purchased by employers their for to and available employees employees themselves. security disability events, benefits In all social comprehen- part mandatory, as are program generally social welfare entitlement sive persons providing have been to all who persons, dependents wage earners, of such wage largely paid on all earn- taxes levied exceptions, employer, no em- no With few ers. security paying lawfully ployee, avoid social can pro- participating this social welfare taxes and gram. coverage,” like "other accident term coverage,” not—now does
term "other health disapproved— extent, has, to that been LeBlanc 8 Id. 9 Id. 444 Mich Opinion by Boyle, payable program.10
include benefits
under such a
Accordingly, although Yancey purchased
policy
of no-fault insurance that
coordinated for
paid
higher
benefits,
work loss
premium
a somewhat
than if the
had been so coordi-
security disability
nated,
they
provided
benefits,
social
"[bjenefits
required
to be
govern-
under the
laws”
ment, "shall be subtracted” from work loss bene-
injury.
fits otherwise
for an automobile
holding,
In so
we follow O’Donnell v State Farm
Mutual
524;
Automobile Ins
404 Mich
(1979),
NW2d 829
in which this Court
held
survivors’ benefits are
11Thompson
subtracted,
v Detroit Automobile
Exchange,
610;
Inter-Insurance
(1984),
NW2d
social
in which this Court held that
security disability
depen
injured wage
dents of an
earner are
Freight
subtracted, and Mathis v Interstate Motor
System,
(1980),
Reversed.
Cavanagh, C.J., JJ., Mallett, and Griffin and J. Levin, concurred with (concurring part dissenting J. in and in
part). express separately We write to the view that long past it is time both to limit v LeBlanc State Co, Farm Mutual 173; Automobile Ins 410 Mich (1981), acknowledge 301 775 NW2d and to that the 10But see n 5. required to be subtracted.
which this Court held that social
Jarosz v
But see DAIIE,
418 Mich
security old-age
565;
The majority
litigation regarding
from
than a decade of
us
more
3109(1)
3109a of the
interpretation
§
act, but
the various
rationales
advanced
continuing
encourage
litigation
will
new rounds
risks of medical
treat-
shifting
the trend of
health insurers
to no-fault
insurers.2
ment
insurers
have
undertaken
simply
The no-fault
risks,
them on the no-fault
place
those
all.
believe
to the detriment of We
insurers works
hoc
of these issues
that continued ad
resolution
judicial
to further
social and
costs.
only
can
lead
i
define the
adequately
does not
The majority
law, there-
required by
difference
between
3109(1),
setoff under
subject
fore
to automatic
health and accident
and "other
3109a. Section
coordinated
offset
to no-fault
insurers
provides an
"[b]en-
under the
efits
LeBlanc,
prospec-
disavow the rationale
We would
tively overrule Tatum.
Kemper
despite
holding
Inc
shift
our
Federal
occurs
Administration,
Inc, 424
Although holding security disability that social payments are to be from no- subtracted majority, benefits, dicta, fault work loss differentiates under between benefits mandatory providing federal entitlement persons . . . "ail taxes on all levied wage earners,” 287, ante and health and acci- coverage provided fringe dent as a benefit of em- ployment, private governmental. whether majority
The converts "benefits” into question "coverage” by concluding 3109a policy, that because the insured had a coordinated consequence health ployment” "in care his em- military primary.
in the
forces is
ACIA,
314, 319;
Owens v
they are "other health under 3109a. despite previous holding
Moreover,
our
"benefits” are to
as a
be determined
matter
law
pol-
statute,
under the no-fault
not the insurance
icy,
Hawkeye-Security
Rohlman v
(1993),
judicial opinions, result, rationale, not the the reasoning, adequate everything. Thus, without majority essentially finds that medical the Owens military the United States services is "other health and the Veterans Administration duplicative § under 3109a accident payments coverage is uncoor- where are available 3109(1) suggests dinated; § in Profit and it only under a "manda- those program largely paid tory . . . federal entitlement wage on earners.” taxes levied all Ante 286. illustrating that the rationale is more
Further important majority part result, than the the iii repudiates opinion the also Jarosa3 Owens turning the benefits distinction between test health or accident into issues and other equivalence. at 321-323. of functional See Owens essentially same, Thus, are where the issues coordinate, § is made to need and a choice corollary is that be considered. The when pur same, are and the insured has issues protection chased uncoordinated DAIIE, (1984). Jarosz NW2d 444 Opinion by Boyle, 3109a, insurer replicate must despite Legislature’s intent. Finally, also invites future distinc- tion 3109a under between those who are insurers of health care and who insurers those are providers, suggesting provi- insurers who ders not fall may phrase within the "health care coverage.”4 3109a Interpreting cover "paid,
provided,” the concludes that services provided required are "benefits” to be to Thus, the insured. the majority transfers and "required "benefits” to be provided” 3109(1) 3109a, suggesting that service in § § kind a is not "benefit” under 3109. Services are § 3109(1) not "benefits” under even if § law to provided, be and not may services be "cov- erage” under 3109a if privately provided. § Tousignant agree with in
We the both result Proñt, disagree Owens. with the result However, our concern that rationale of the opinions perpetuate litigation regarding will scope of no-fault coverage, the conditions under which coordination be might appropriate, and the 3109(1) extent to which has any continued viabil- § ity. This could be distinguish- avoided properly ing between 3109a.
II. PROFIT v CITIZENS INSURANCE goal of the no-fault insurance system was to provide assured, victims of motor vehicle accidents adequate, and prompt reparation for certain eco- By making nomic losses. no-fault insurance cover- Owens, suggests It should be noted also that as in Justice Levin Tousignant 308-309, there is a distinction between insurer provider, suggesting and a health care purposes there is a distinction for provision pay of 3109a between the of and the services ment of bills. Co v Citizens
age mandatory, 24.13101, 500.3101; MCL MSA Legislature that victims automobile ensured recompensed injuries sus- would be accidents tained in motor vehicle accidents. mandatory, system However, it was imperative to contain costs so vehicle purchase registrants afford could owners Legislature policies.5 Therefore, insurance "[bjenefits provided or mandated subtraction under the laws government . . . from the state or the federal personal protection otherwise insurance benefits 500.3109(1); injury.” payable 24.13109(1). MCL MSA for the primarily The insurer remains liable personal protection may benefits, it for the but liability of its where the laws of reduce any extent government or the mandate injury.6 benefit be as a result of originally enacted, As the act did not contain already by which those who were cov- mechanism health and accident insurance ered under a personal coordinate with could protection State or federal law does insurance. *11 currently mandate that "other health and accident coverage” purchased by anyone.7 The or for be Legislature recognize many did, however, in that registrants vehicles of motor instances owners and Michigan by other health and in were also covered accident insurance._ 524, O’Donnell State Farm Mutual Automobile (1979). 547-548; 273 NW2d "provided mandatory or to be The subtraction provided” pursuant to law allows insurers to antici state provides being the pate If or federal law the risk secured. insurer, the no-fault a source other than
benefit is securing basic is that risk and can reduce the the no-fault insurer not premium accordingly. no-fault way arguably pave for circumvention would government mandatory health to mandate were the federal setoff possibility coverage restraint. for all. That counsels insurance 444 Mich Boyle, J. premiums not re- insurance have been [A]uto persons anticipated. Many as had duced some average regards in overbuying believe the driver is to accident and medical insurance since no-fault portions coverage overlaps with of the medical coverage private offered accident plans group health insurers and the of Blue Cross persons Blue Michigan Shield. Some claim pay residents not should to for this coverage duplicate automobile insurers should offer deductions at and exclusions reduced premiums pay coverage to those for who similar Further, plans. under other health and accident many duplicate contend elimination of cover- age by insurers the no-fault result savings Michigan substantial drivers. [House 5724, 27, Legislative Analysis, February HB 1974.] years mandatory Two after the advent of no- Legislature fault, the amended no-fault act to provide personal pro- providing that "[a]n insurer appropri- offer, tection insurance benefits shall ately premium rates, reduced deductibles and ex- reasonably clusions related to other health and coverage accident on 500.3109a; the insured.” MCL 24.13109(1). may § 3109a, MSA Under an insured opt coverage, making to coordinate insurance primarily health and accident insurer liable for coverage medical the event of an automobile mandatory is in accident. This direct contrast subtraction of benefits received or be received from another source to state or federal liability law the insurer’s for those benefits. coordinated, Because in- simply expense surer is liable payments until the benefits under "other health accident have been exhausted. undisputed savings
It is on basic no-fault *12 Citizens Ins Co by Boyle, J. no- goal original was a premiums insurance through the accomplished to be fault act and was provided duplicative of setoff mandatory to or federal law government by 3109(1). 3109a, Legisla- the enacting under § § savings would be anticipated that further ture Duplicative insur- an individual basis. effected on the option avoided coverage would be ance be insured, insurance premiums the Moreover, 3109a to reflect this choice. reduced the more insurance require who allows consumers not to coordi- arrange by opting for it to flexibility coverage higher premium. the paying nate Therefore, to the rationale advanced contrary are served separate purposes majority, the We when we held and 3109a. erred §§ re- intended to include benefits Legislature by law under umbrella quired to be coverage, health and accident of other further error, compounded by today’s majority, 3109(1), cost purpose contain- undermines ment.8 3109(1) the court must first determine
Under §
insured
available
to the
whether
other
provided pursuant
or
were
Legislature
recently
parenthetically
has
We note
does not
531, 620, 1395b, to 42 USC 1395 to Stat 1395w-2, 1395Í-4, 1395t, 1395j 1395w-4 to 1395u to 1395Í-2 to 1395ccc, 531, act, chapter or title XIX of 1396u, coverage 620, 1396 to 1396f and 1396i Stat pursuant USC supplemental policy or certificate to a medicare organization maintenance issued health contract individual and accident 500.3109a(3); eligible health for is not considered other medicare purposes section. [MCL of this 24.13109(1X3).] MSA *13 296 444 Mich 281 Boyle, J. by Opinion If to state or federal law. state or federal law provision, mandates the benefits must be deducted from no-fault benefits under 3109(1) they: if 1) purpose Serve the same as the no-fault benefits, and 2) Are are DAIIE, as a result of the v same accident. [Jarosz 565, 577; 418 (1984).] NW2d undisputed It is that law federal mandates that security disability "provided.” social benefits be undisputed plaintiff 423. See USC It also is receiving security disability has been social Furthermore, benefits. the benefits serve the same purpose as no-fault work loss and are as result the same accident. See Thompson DAIIE, 610, NW2d (1984) concurring) ("[T]he (Ryan, J., work loss benefits and the social payments both [the are intended to relieve dis- person] family abled and his of the economic hard- ship inability which would result from his injuries wages support of his to earn himself family”). his agree Thus, we security disability
insurer must subtract plaintiff benefits received benefits otherwise from the work loss payable, not because social secu- rity mandatory program paid is a entitlement wage earners,” 287, "taxes levied on all ante at provided pursuant but because federal law and meets test. Jarosz
III. OWENS v ACIA 3109(1), plaintiff’s Under the acia is liable for may liability medical benefits but reduce its to the Ins Co Profit v Citizens requires instance, law that, in extent provided by another the medical benefit requires undisputed that federal law It is source. that veterans at a Veter- to treatment are entitled facility. 1710. 38 USC ans Administration provided by Ad- the Veterans care The medical purpose the no- same as serves the ministration fault injury received medical benefit —treatment addition, va in care was received for which automobile accident. the same accident as a result of sought. no-fault medical benefits *14 directly available at a Therefore, if treatment facility, may value of that subtract the acia va it would other- from the medical benefits treatment wise be liable to
pay Owens, because the to coverage,” care Owens medical was "health care it a 321-322, is benefit at pursuant but because Jarosz and meets the test.9 to federal law facility, a va is not available at If medical care contract for medical allows the va federal law facility. private However, 38 USC 1703.10 in a care at the discretion contract care is argues genuine fact exists that a issue of material acia regarding availability at of treatment for Owens a va direct regarding development agree. the loca facility. We Further factual (if any) provide the treatment that could tion of va facilities Thus, possible. we remand for a trial Owens directly provided have been whether treatment could determine facility. va 1703(a) provides pertinent part: 38 USC (a) furnishing capable Department of are not When facilities geo- hospital because of care or medical services
economical graphical furnishing capable inaccessibility or are not Secretary may required, .. . contract with or services care non-Department ing: in order to furnish the follow- facilities (1) Hospital for the or medical services a veteran care of— treatment (A) disability; a service-connected (B) discharged disability or re- a veteran was for which [Emphasis military .... added.] leased from the active 444 Mich Secretary Affairs, of Veteran we would hold it "required provided” is not to be within the mean- §3109(1). ing of Contract care need not be sub- expense tracted from medical benefits otherwise payable secretary unless the has exercised discre- care, tion and authorized the and the insured has opted not to be treated at the authorized contract facility. circumstances, Under these the no-fault insured’s efforts to obtain the benefit become rele- minimum, vant. At a government the insured must ask the
to exercise its discretion and award secretary the benefit. If the then decides not to private care, contract for the benefit is not "required §3109(1), provided” meaning within the liability
and the no-fault insurer’s expense may the medical not be reduced.11 Finally, agree because we that social disability benefits are benefits that must be sub- tracted from the insurer’s no-fault work loss agree benefits otherwise Proñt, we they must also be subtracted from the acia’s liabil- ity here.
We would also hold that the Veterans Adminis- tration benefits must be subtracted from work pay. loss benefits the acia would otherwise *15 Veterans Administration provided pursuant to federal law. See 38 USC They payable 1131. are to a veteran who was discharged "[fjor disabled and from service disabil- ity resulting personal injury from suffered or dis- duty, aggra- ease [the] contracted in line of or for preexisting injury vation of a suffered or disease duty, contracted in [the] line in the active military .. . .” Furthermore, Id.12 the va disabil- 11 genuine We would also hold that a issue of material fact exists regarding through contract care available to Owens the va. 12 regard they In this compensation are akin to workers’ benefits payable injured compensate to an worker to the worker for decreased 299 Co Profit v Citizens Ins a result of payable were as in this case
ity benefits loss work for which same accident payable. are benefits
IV. TOUSIGNANT v ALLSTATE the notion that introduces also to obtain” efforts make "reasonable must insured provi- care the health or treatment payment insurer to the no-fault turning before der 311-312, Post expenses. of medical payment Ins Automobile Mutual Perez v State Farm citing (1984). Co, We 634; 418 Mich NW2d opted to coordi- insured has that where an hold 3109a, insured has to pursuant coverage nate benefits under agreed first to seek contractually cov- health and accident preexisting the insured’s erage. efforts” to the "reasonable
References context, are, in this payment to obtain insured uncertainty irrelevant, increase only and will agreed to coordinate litigation. Tousignant add The no-fault 3109a. if coordinated the insured provides expressly then Allstate would coverage, elements “not extent be liable Protection Insurance under Personal loss covered paid, payable or expenses allowable required . . to . named provisions any valid and . . . insured under collectible "(a) individual, group dis- blanket or accident hospitalization
ability or insurance,_ capacity. compensation must wage-earning Workers’ benefits. See Perez v work loss off from automobile no-fault be set 634; 344 NW2d Farm Mutual Automobile State (1984); Freight System, Motor Mathis Interstate (1980). NW2d *16 Opinion by Boyle, J. "(b) plan surgical reimbursement medical 304, . . . at n 5.] [Id. language policy, Thus, under the clear simply expense Allstate is for liable benefits by should have been for or policy require another source. The does not the insured make efforts obtain reasonable liability benefit other source. Allstate’s expense premised for medical on their unavailability from other sources. If medical ex- pense benefits were available to the insured under any plan, pay other health care Allstate need not they pay. them; not, if were Allstate must opinions majority sum, constitute another step process legislative in a that undermines the 3109(1). purpose By examining §of the insurance restrictively issue, rather than the defining phrases 3109(1), treating benefit under equivalents other,
as functional of each opinions convert "benefits” that state provided, or federal law mandates be into "other coverage.” health accident Section allows no-fault insurers to subtract from benefits owed, otherwise quired those benefits or re- provided or provision pays law. The focus is not on who Rather, the benefits. the focus is on whether the provided pursuant Only to law. provided pursuant benefits not to "the laws government” subject state or the federal coordination under 3109a.
Brickley Riley, JJ., Boyle, concurred with