ARTHUR JARRAD V INTEGON NATL INS CO
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STATE OF MICHIGAN
COURT OF APPEALS
ARTHUR JARRAD,
UNPUBLISHED
January 27, 2004
Plaintiff-Appellee,
v
No. 245068
Ingham Circuit Court
LC No. 00-092678-NF
INTEGON NATIONAL INSURANCE
COMPANY,
Defendant-Appellant.
Before: Zahra, P.J., and Cavanagh and Cooper, JJ.
ZAHRA, P.J. (dissenting).
I respectfully dissent. I conclude that defendant should be entitled to set-off the longterm disability wage loss benefits plaintiff received through his employer’s self-funded plan
because these benefits constituted “other health and accident coverage” that is subject to
coordination under MCL 500.3109a.
The majority concludes that this case is governed by Spencer v Hartford Accident &
Indemnity Co, 179 Mich App 389; 445 NW2d 520 (1989). In Spencer, supra at 391, the plaintiff
received worker’s compensation benefits after he was injured in the course of his employment
with a township. Pursuant to a collective bargaining agreement, the township directly paid the
difference between the amount of the plaintiff’s workers’ compensation benefits and his base pay
rate. Id. The defendant, the no-fault carrier for the township, claimed this payment made by the
plaintiff’s employer directly to the plaintiff amounted to “other health and accident coverage”
that was subject to coordination under MCL 500.3109a. Id. This Court concluded that this
payment of wages made to the plaintiff directly from his employer pursuant to a collective
bargaining agreement did not constitute “other health and accident coverage” under MCL
500.3109a. Id. at 400. I conclude that Spencer is distinguishable from the present case. In
Spencer, as opposed to the present case, the “benefit” at issue was compensation for employment
that was paid directly to plaintiff by his employer; it was not an insurance-type benefit. Here,
plaintiff’s collective bargaining agreement provides that long-term disability benefits will be
provided for the employee. This long-term disability benefit is a self-funded plan where the
employee is paid from accumulated payroll contributions. Benefits payments are made to the
employee through a third-party, Aetna Life Insurance Company. The benefit is not paid directly
by the employer as it was in Spencer. The long-term disability benefit at issue in the present
case is exactly the type of benefit subject to coordination under MCL 500.3109a.
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I conclude this case is governed by Rettig v Hastings Mut Ins Co, 196 Mich App 329,
330; 492 NW2d 526 (1992). In Rettig, supra at 330, this Court concluded that the defendant
insurance company was entitled to exclude the long-term disability benefits received by the
plaintiff under a long-term disability insurance policy that was paid for by the plaintiff through
payroll deductions. This Court held that the plaintiff’s long-term disability insurance benefits
constituted “other health and accident coverage” under MCL 500.3109a, “because they
constitute protection typically provided by health insurance plans, which include payments for
medical expenses resulting from an accident as well as wage-loss replacement benefits.” Id. at
332-333 (emphasis added). Because long-term disability benefits constitute protection typically
provided by health insurance plans, plaintiff’s benefits in the present case also constitute “other
health and accident coverage” under MCL 500.3109a.
That plaintiff’s long-term disability benefits were not actually provided by an insurance
company is not dispositive. Although the term “coverage” has been interpreted to mean
coverage provided by an insurance company, LeBlanc v State Farm Mut Automobile Ins Co, 410
Mich 173, 204; 301 NW2d 775 (1981); Spencer, supra at 400, “the Legislature purposely used
the broad term ‘coverage’ rather than ‘insurance’ in describing health and accident benefits
available to the insured independent of the no-fault contract,” Lewis v Transamerica Ins Corp of
America, 160 Mich App 413, 418; 408 NW2d 458 (1987). Michigan courts have found that
“other health and accident coverage” encompasses coverage that is typically provided by
insurance companies, but is not actually provided by an insurance company under the facts of the
case. See, e.g., Tatum v Gov’t Employees Ins Co, 431 Mich 663; 431 NW2d 391 (1988)
(military medical benefits paid by the federal government constitute “other health and accident
coverage” under MCL 500.3109a); LeBlanc, supra (medicare constitutes “other health and
accident coverage” under MCL 500.3109a); Lewis, supra (medical benefits provided by a
Teamsters Union welfare plan constitutes “other health and accident coverage” under MCL
500.3109a); United States Fidelity & Guaranty Co v Group Health Plan of Southeast Michigan,
131 Mich App 268; 345 NW2d 683 (1983) (health maintenance organizations constitute “other
health and accident coverage” under MCL 500.3109a); Bagley v State Farm Mut Automobile Ins
Co, 101 Mich App 733; 300 NW2d 322 (1980) (medical and disability benefits provided by the
Army and Veterans Administration constitute “other health and accident coverage” under MCL
500.3109a). The trial court’s order granting plaintiff’s motion for summary disposition should
be reversed, and the trial court should enter an order granting summary disposition for defendant.
/s/ Brian K. Zahra
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