Michigan Court Clarifies Liability for COB Provisions in ERISA and Auto Plans

Extract

In Campbell Soup Co. v. Allstate Insurance Co. (913 F. Supp. 451 (W.D. Mich. Jan. 9, 1996)), the United States District Court for the Western District of Michigan, Southern Division, held that a health plan's coordination of benefits (COB) clause, covered under the Employee Retirement Income Security Act (ERISA), does not preempt a similar no-fault automobile insurance clause in the absence of irreconcilable conflict. The court found that ERISA's policy of shielding plans from unanticipated claims could only be furthered when the plan had expressly disavowed such claims. Because the ERISA plan in this case did not specifically subordinate itself to the no-fault policy, the district court found that the no-fault COB clause controlled. However, to escape this ruling, ERISA plans need only redraft their COB clauses specifically to disclaim liability in case of conflict with provisions of no-fault insurance policies. This caveat substantially limits the scope of the court's ruling.