By: Andrew Silverio, Esq.
Recently, the Michigan Senate passed sweeping legislation in an effort to get their auto insurance rates, which are the highest in the nation, under control. The main way Michigan aims to accomplish this is by eliminating their requirement that auto insurance policies carry unlimited “Personal Protection Insurance” (commonly referred to elsewhere as “Personal Injury Protection” or “PIP” coverage), which is no-fault first party medical coverage. Under the old system, with exposure to the carrier being quite literally unlimited, premiums predictably climbed to unsustainable levels.
The new law will require that carriers offer PPI options with $500,000 and $250,000 limits, as well as an unlimited option. It also allows for a $50,000 limit for policyholders on Medicaid only, and importantly, allows policyholders to waive PPI coverage completely if they have Medicare coverage or “other health or accident coverage” which provides benefits for accident claims.
So, why are we talking about changes to auto insurance laws? Because policies carrying these new limits will shift liability onto health plans. In light of the previous availability of unlimited PPI coverage, many self-funded Michigan health plans already exclude charges resulting from auto accidents completely. Under the new law, this should exclude an individual from waiving PPI, however it’s probably unreasonable to expect individuals to be educated enough or review applicable requirements in enough detail to understand these requirements, or for carriers offering these policies to do the legwork to determine whether an applicant’s health plan actually covers auto accident claims. So, the end result may be that individuals are left with no coverage at all for auto accident claims. This means that in addition to making sure that plan language is tight, it’s crucial for employers to educate their employees about health coverage and their responsibility to have other coverage available via auto insurance.
This could also impact how plans who don’t exclude auto claims completely – the approach of quickly paying everything up front without question with the understanding that unlimited PPI coverage is available for reimbursement after the fact is no longer such an appealing option. No matter what the existing approach to these claims, now is the right time for Michigan employers to reexamine how they handle auto accident claims and coordinate with PPI coverage.
By: Chris Aguiar, Esq.
As we saw last week, you cannot add the Patriots’ winning the Super Bowl to the list of absolutes in life (despite what my New England brethren might tell you). After death and taxes, few things are a given. Something similar can be said, that success is not a given, in the world of subrogation/reimbursement.
Last week, I had the pleasure of traveling to Kansas City, Kansas to testify on behalf of a client in a Preliminary Injunction Hearing in Federal District Court as we attempted to obtain a Temporary Restraining Order, a court proceeding to officially freeze the ability of an attorney or his client from spending money to which the Plan asserts an equitable lien by agreement. We spent weeks preparing, researching, committing facts to memory, and rehearsing examinations so that we could put our client in the best position to succeed. Unfortunately, the Judge had other Plans. Despite having witnesses from Kansas and beyond ready to testify – the Judge did not allow any testimony to be heard.
In the end, we were ultimately able to secure everything we needed for our client, but it's notable that something as simple (and typically predicable) as the procedure that a hearing will follow was entirely up to the discretion of the Judge that day. The Judge seemed to have an agenda, and there would be no deviating from it. We ended up on the right side of that agenda, but what if the alternative had been true –a significant risk given that Kansas qualifies as an anti-subrogation state. It’s very important in subrogation cases to consider all options. In many cases there is no doubt that the Plan’s rights are strong, but enforcement often comes at a significant cost. Unfortunately, in the world of Health Subrogation where Plan expenses appear to be limitless while tort reform and other factors allow auto policies to be limited to, in many cases, less than $100,000.00, the cost of enforcing the rights of the Plan in full can leave the Plan worse off than it started. That can even be true when things go exactly right – imagine when a Judge decides to throw a wrench into “the Plan”!