As the new year approaches, many employers offer new enrollment options for employee health insurance plans. It is essential to understand that these changes can impact your No-Fault medical benefits following a car accident. One significant effect is that it may limit your ability to receive treatment from your preferred doctor.
For this reason, it is crucial to inform your lawyer about any health insurance changes, no matter how small or insignificant they may seem.
Car Accident Victims with Coordinated Coverage
Many auto accident victims in Michigan have coordinated coverage, meaning their health insurer is the primary payer for medical bills after a crash, while auto No-Fault insurance coverage is secondary – meaning your auto insurance is secondary to your health insurance.
However, many people have health insurance plans that contain “auto accident exclusion” clauses or “secondary payer” clauses, making your No-Fault insurance primary.
If you’ve been injured in an auto accident and you are currently receiving medical care from doctors you like and trust, big problems can occur when you make a healthcare plan change, select a new health plan from your employer, or when your employer switches health insurance to a new plan.
The problems for auto accident victims that arise can include:
- Informing Providers: The accident victim must inform healthcare providers that health insurance, not No-Fault, will be paying for services.
- Network Limitations: The victim must verify if their doctor is part of the health insurer’s HMO network. If not, they may need to switch doctors or risk financial penalties or even a denial of coverage, leading to significant out-of-pocket expenses.
- Switching Plans: If the health insurer’s HMO network is too limited, the victim may consider switching to a PPO plan, which offers greater flexibility in choosing doctors.
- Prior Authorization: The health insurer’s plan may require prior authorization for procedures, treatments, and surgeries. In contrast, No-Fault insurance does not require such authorization.
What are Common Health Insurance Restrictions for Auto Accidents?
Health insurance helps cover the cost of medical care and treatment. It may be purchased individually or provided by an employer.
All health insurance plans come with some restrictions. This is why your auto attorney will always need to read and review your health insurance policy as many of these restrictions will apply to what health insurance will pay for if you are in an auto accident.
As an auto accident attorney, these are some of the common health insurance restrictions that I see when I am reviewing my client’s health insurance plans:
- Limited Choice of Providers: You may be required to receive care only from doctors within the health insurer’s HMO network.
- Prior Authorization: You may need to obtain prior approval from the insurer before receiving treatment or undergoing procedures.
- Out-of-Pocket Costs: Health insurance often requires you to pay deductibles, copays, and coinsurance.
- Service Limitations: Health plans may refuse to cover specific services crash victims need, such as residential care, attendant care, therapy, prescriptions, medical transportation, and home or vehicle modifications.
Your auto No-Fault insurance will not have these same restrictions.
What Are No-Fault Medical Benefits?
No-Fault medical benefits cover the costs of medical care and treatment, including doctor visits, exams, procedures, surgeries, physical therapy, rehabilitation, home and vehicle modifications, and prescription medications.
The amount of coverage available depends on the level of No-Fault PIP medical benefits coverage chosen in the auto insurance policy. (MCL 500.3107c(1))
What is Coordinated Coverage v. Uncoordinated Coverage?
Coordinated coverage, also known as “coordination of benefits,” is when a driver agrees with the auto insurance company that their health insurance will be the primary payer for any medical expenses resulting from a car accident. (MCL 500.3109a(1))
Under this arrangement, the auto insurer’s obligation to pay No-Fault medical benefits—as a secondary payer—only begins after the driver’s health insurance coverage has been exhausted.
As attorneys, we often recommend that drivers purchase “uncoordinated” coverage. This means that No-Fault insurance serves as the primary payer for crash-related medical expenses. However, many insurance agents do not quote for uncoordinated coverage unless they are asked to do so as uncoordinated No-Fault will be more expensive. We get it, insurance is expensive, and no one thinks that one day they are going to be in a bad car accident and will need some of the advantages that come with buying an uncoordinated No-Fault policy over a coordinated No-Fault policy. We certainly understand that many people will choose to opt for coordinated coverage because it is cheaper. In fact, an auto insurer is required by Michigan law to offer coordinated coverage at a “reduced premium” to uncoordinated coverage. (MCL 500.3109a(1))
Injured in a car accident in Michigan? Call the attorneys at Michigan Auto Law for a free consultation!
If you were injured in a car accident in Michigan and wondering how your CURE car insurance coverage impacts your claim, call now (888) 899-7167 for a free consultation with an experienced car accident lawyer. There is no cost or obligation. You can also visit our contact page or use the chat feature on our website.
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