May 24, 2019
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No-Fault Auto Reform Bill Headed to Governor's Desk
Late this afternoon, the Legislature overwhelmingly passed a bipartisan no-fault reform package and shipped it to Governor Gretchen Whitmer’s desk for her expected signature.

After weeks of negotiations, the governor, Speaker Lee Chatfield, and Senate Majority Mike Shirkey came to an agreement to reform Michigan’s no-fault auto law. As MAIA shared with you earlier, the bill contains PIP choice levels, automatic rate rollback on the PIP portion of the policy, and a fee schedule, among other changes.  

The bill passed the House by a vote of 94-15 and it passed the Senate by a vote of 34-4. 

Please Note: the fee schedule change was inadvertently omitted in our News Now sent earlier today. 

  • Includes fee schedule with multiple levels to be implemented July 1, 2021. It will begin at 200% of Medicare and phase down to 190% of Medicare. Hospitals with Level 1 and 2 Trauma Centers and those that serve high percentage of Medicaid patients will be subject to a slightly higher Medicare based fee schedule.  
If you missed the News Now e-newsletter sent earlier today, you will find it below.
No-Fault Reform Deal Struck
Governor Gretchen Whitmer, Speaker Lee Chatfield, and Senate Majority Leader Mike Shirkey announced they have reached a compromise on reforming Michigan’s auto no-fault law. After days of closed-door negotiations, the leaders rolled out Michigan’s first major changes to no-fault in decades. Votes are expected later today in both chambers to send the compromise version of Senate Bill 1 to Governor Whitmer’s desk for her expected signature. MAIA will have a detailed breakdown of the changes to no-fault in the weeks ahead. MAIA will be reviewing the bill and determining our next steps as soon as possible. 

Here are the highlights for today:

  • Allows an insured person to select an Unlimited, $500,000 or $250,000 Personal Injury Protection (PIP) option. 

  • Allows seniors on Medicare to opt out of purchasing PIP coverage entirely, and allows Medicaid recipients to purchase a PIP policy of $50,000. 

  • Permits enhanced coordination with health insurance. For insureds who select the $250,000 PIP option, the bill will allow for 100% PIP reduction with health coverage that covers injuries related to an auto accident. 

  • Includes a mandatory rate rollback on the PIP line of the auto policy. The rollbacks are: 10% for Unlimited coverage, 20% for $500,000, 35% for $250,000, 45% for $50,000, and 100% PIP reduction for Medicare or Enhanced opt-outs.

  • Increases current minimum coverage of residual liability insurance from $20,000/$40,000 to $50,000/$100,000.

  • Increases the mini-tort provision from $1,000 to $3,000.

  • Prohibits the use of most non-driving rating factors. Insurers will still be allowed to use credit information and territory as a rating factor.

  • Requires a statutory form be created by DIFS that requires the insured's signature acknowledging coverage level. This is a consumer protection issue since the current no-fault system has been in place for over 40 years and has been advocated for by MAIA.

  • Puts in statute the current auto insurance fraud task force within DIFS to investigate insurers, health providers, drivers or anyone who is defrauding the system for personal benefit.

Look for future News Now updates, including a more detailed look into the coming changes to no-fault auto insurance.
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