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Memberselect Insurance Co. v. Cofinity, Inc.

United States District Court, E.D. Michigan, Southern Division

December 11, 2019


          Stephanie Dawkins Davis Magistrate Judge



         In 2014, Corey Dunbar sustained serious injuries in a car accident. Dunbar was covered by his father's no-fault automobile insurance policy provided by Memberselect Insurance Company. Memberselect paid over $55, 000 in resulting medical expenses. Dunbar was also covered as a dependent under his parents' self-funded, ERISA health-insurance plans provided by their employers. Memberselect requested reimbursement for Dunbar's medical expenses from Cofinity Inc., which administers his father's health insurance. Memberselect argued Cofinity was Dunbar's primary insurer according to Memberselect's policy on coordination of benefits. Cofinity refused the requests, stating that the mother's insurance plan was, in fact, Dunbar's primary health insurance coverage. Memberselect brought suit against Cofinity and its parent company, Aetna Health Inc. Defendants seek summary judgment on the ground that it is not the insurer responsible for Dunbar's medical expenses. (ECF No. 13.) For the reasons that follow, the Court grants Defendants' motion.


         The material facts of this case are not in dispute. On or about June 22, 2014, Corey Dunbar, a minor, was injured when he was struck by a motor vehicle. (ECF No. 1, PageID.9.) Dunbar was covered by a valid automobile insurance policy issued by Memberselect to his father, Bruce Dunbar. (Id.) The Memberselect policy provided for coordinated medical benefits in the case of personal injury from a motor vehicle accident. (Id.) Memberselect paid Dunbar's medical costs that resulted from the car accident. (Id. at PageID.10.)

         At the time of the accident, Corey Dunbar was also insured under the health insurance plans of his father and mother. (Id. at PageID.9; ECF No.13-2, PageID.162.)

         Defendant Cofinity was “created by AETNA Health, Inc. to provide services and products to other insurance companies, third party administrators (TPAs), and other health plans.” (ECF No. 13, PageID.142.) Cofinity provides network services for Bruce Dunbar's health fund, the Electrical Workers' Insurance Fund (EWIF). (ECF No. 13, PageID.142.) These services are administered by Professional Benefits Services, Inc./Varipro, a third-party administrator of self-funded health benefits plans. (Id.; ECF No. 13-3, PageID.165.) EWIF was created through collective bargaining and is subject to the Employee Retirement Income Security Act of 1974 (ERISA). (Id.)

         The health care plan of Corey Dunbar's mother, Judy Dunbar, is a self-funded plan through UMR-Beaumont. (ECF No. 13, PageID.146.) It too is governed by ERISA. That plan is not a party to this suit.

         On November 24, 2014, Memberselect sent Cofinity a “formal notice of . . . subrogation rights, ” which stated that it considered Cofinity to be Dunbar's primary health insurer and planned to seek reimbursement for Dunbar's claims. (ECF No. 13-5, PageID.170.)

         Memberselect's assertion that it was not Dunbar's primary insurer was based on its General Insuring Agreement, which sets out limits for benefits for bodily injury when the customer elects a “Coordinated Medical Benefits” plan.[1] (ECF No. 1, PageID.23.) The policy states, “it is agreed that primary medical insurance or health care benefit plans providing coverage for motor vehicle accident injuries are available to you or a resident relative and are your primary source of protection.” (Id.) The policy goes on to say Memberselect will pay benefits for reasonable charges “except to the extent that . . . benefits are paid or payable under your primary protection.” (Id.)

         On April 28, 2014, a Memberselect claims specialist sent another letter to Cofinity, this time formally requesting reimbursement in the amount of $55, 535.18. (ECF No. 13-6, PageID.173.) Memberselect identified itself as an “excess insurer.” (Id.) On October 12, 2015, Memberselect sent a final letter to Cofinity again requesting reimbursement. (ECF No. 13-7, PageID.175.)

         Varipro, on behalf of Cofinity, declined the requests for reimbursement based on a determination by Varipro that Judy Dunbar's health-insurance plan was primary over Bruce Dunbar's EWIF plan. (ECF No. 13-2, PageID.162.)

         This determination was made based on the Coordination of Benefits provision in the EWIF summary plan description. (ECF No. 13-8, PageID.179.) The plan contains specific guidelines for determining primary and secondary plans for dependents. In relevant part, the policy states “(The ‘Birthday Rule'): If a child is covered under both their mother's and father's plan, the plan of the parent . . . whose birthday is earlier in the year is primary.” (Id. at PageID.180.) Judy Dunbar was born earlier in the year than Bruce Dunbar (March versus December). (ECF No. 13-2, PageID.163.) The EWIF plan description also asks the customer “to ask your health care provider to submit claims to your primary carrier first.” (ECF No. 13-8, PageID.180.)

         After Defendants declined to reimburse Memberselect, Memberselect sued Aetna and Cofinity in the Wayne County Circuit Court. (ECF No. 1, PageID.7.) The ...

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