No-Fault Reform Update: Change in Medical Benefits

UPDATE: 9/24/2019

DIFS Rules MACP Claims Remain Unlimited Until July of 2020

Today (9/24/2019), the Department of Insurance and Financial Services released a new Director’s Order regarding the effective date of Michigan Assigned Claims cap.

In short, the Director has ruled that any claims that are referred to the MACP will remain unlimited until July 2, 2020.

This ruling is in addition to yesterday’s Director’s Order that stated that companies are required to submit policy form changes to DIFS and receive the Director’s approval prior to implementing the new order of priority changes in the law.

Director’s Order No.19-049-M on the Effective Date of the Cap on PIP Benefits Provided Under the Michigan Assigned Claims Plan states that, “this order notifies the MAIPF that any attempt to rely on the amendments made by PA 21 and PA 22 to cap benefits at $250,000 prior to July 2, 2020, is prohibited.”

The Director had three reasons for this decision.

  1. It “would conflict with the longstanding legislative purpose of the Code to protect policyholders, creditors, and the public.”
  2. It “ignores sound principles of statutory construction.”
  3. It “frustrates the intent of other statutory amendments, including the residual liability protections contained in Section 3009 of the Code, MCL 500.3009.

Stay tuned for more updates.

 


August 22, 2019 – Effective June 11, 2019, when no-fault reform was signed into law, claims sent to the Michigan Assigned Claims Plan (MACP) no longer have unlimited Personal Injury Protection (PIP) AND the circumstances changed when an injured person ends up in the MACP.

Benefit level is now capped at $250,000.

How does someone end up in the MACP and how did that change?

BEFORE REFORM, An injured person collected PIP benefits in the following order:

  1. Insurer of the Named Insured (your own policy)
  2. Insurer of a Spouse or Resident-Relative
  3. Insurer of the Owner or Registrant of the accident-involved vehicle
  4. Insurer of the Driver of the accident-involved vehicle
    If none of the above apply,
  5. Injured person applies for benefits through the MACP (unlimited)

NOW, An injured person collects PIP benefits in the following order

  1. Insurer of the Named Insured (your own policy)
  2. Insurer of the Spouse or Resident-Relative
    If none of the above apply,
  3. Injured person applies for benefits through the MACP ($250,000 cap)
  • No-Fault Reform eliminated the owner, registrant, and driver of the accident-involved vehicle from the order of priorities.
  • No-Fault Reform changed the benefit level.

COVERAGE NO LONGER EXTENDS TO:

  • Named Insured’s non-relatives who live in the house
  • Relatives who do not reside in the household EVEN IF THEY ARE LISTED AS DRIVERS

EFFECTIVE JULY 2, 2020, An injured person will collect PIP benefits in the following order:

  1. Insurer of the Named Insured (your own policy)
  2. Insurer of the Spouse or Resident-Relative; then
  3. Injured person applies for benefits through the MACP ($250,000 or $2,000,000 if the injured selected less than unlimited PIP and is within 30 days of losing qualified health insurance)

If a non-relative lives with you or if you have a family member on your policy who does not live with you, this affects you. Contact your agent to find out more about no-fault reform and discuss changes that may be necessary.

More Resources for No-Fault Reform

Governor Signs No-Fault Reform Bill

No-Fault Reform Deal Struck

Michigan Assigned Claims Plan Website