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No-Fault Explained: Coordinated Coverage and Subtracted Benefits

The Michigan No-Fault Act is intended to make sure no victim of an auto accident is left without medical care. But who pays for those medical expenses can sometimes get complicated, particularly when government benefits get involved.

MCL 500.3109 and MCL 500.3109a apply to subtracted benefits and coordinated coverage. These statutes explain when your auto insurance provider is allowed to subtract or “set-off” benefits you receive from other sources.

Subtracted Benefits

Any time an accident victim is entitled to benefits under state or federal law, those payments can be subtracted from what the auto insurer has to pay. For example, if a truck driver is injured on the job, he may be entitled to Workers’ Compensation benefits. Because this is mandated by law, whatever he receives from Workers’ Comp will reduce the benefits he receives from his no-fault provider. Other set-off benefits could include social security payments or certain survivor benefits.

The legislature created these set-offs to prevent injured motorists from recovering twice for the same expense. Because of this, they happen automatically. If your accident could entitle you to benefits through social security disability, workers’ compensation, or other public welfare laws, your auto accident attorney should go over these with you to make sure you get all of your expenses covered.

Coordinated Coverage

Where subtracted benefits are automatic, coordinated coverage is optional. The Michigan No-Fault Act allows auto insurance providers to offer reduced-price policies if those policies are coordinated with a health insurance policy. Without this provision, your auto insurance provider would pay all of your medical expenses after an accident – even those that could otherwise be paid using your health insurance.

Under a coordinated coverage plan, you agree to turn to your health insurance first to pay for medical expenses after an accident. Then your auto insurance policy will fill in any gaps: deductibles, co-insurance, copays, or treatments not covered by your health insurance.

Coordinated coverage plans cost less than traditional no-fault auto insurance policies because your insurance provider will pay less after any accident. This can be a good option if you have high-quality health insurance, or if that coverage is provided by an employer.

But if circumstances change, for example if you lose your job because of your accident, your coordinated coverage policy could leave you in a gap between the reduced-cost auto insurance policy and a lapse health insurance plan. If you do decide to use a coordinated coverage policy, make sure you review that policy any time your health insurance changes.

Subtracted benefits and coordinated coverage can create complicated legal situations, with different insurance providers and government agencies pointing to one another over who has to pay for your care. If you receive public assistance or use a coordinated coverage policy, be certain to hire a legal team that focuses on no-fault law, with all its complexity. The Christensen Law team has handled auto accident cases for over 20 years. They understand set-offs and coordinated benefits and can make sure all your medical needs are covered.