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Michigan Supreme Court Says No-Fault Act Amendments Apply Only Prospectively

September 1, 2022

The Michigan Supreme Court recently answered the question whether the 2019 legislative amendments to the No-Fault Act, MCL 500.3101 et seq., that limited reimbursement for expenses covered by personal protection insurance applied retroactively. If so, this would limit benefits to those injured before the effective date of the amendments.

In the case of Andary v. USAA Cas. Ins. Co.,  2022 Mich. App. LEXIS 5127 (Mich. App. August 25, 2022), the Court concluded that the amendments do not apply retroactively because the State Legislature did not clearly demonstrate an intent for the amendments to apply retroactively to persons injured in pre-amendment accidents.

The Michigan No-Fault Act

Since the inception of the no-fault act in 1973, Michigan has required that personal protection insurance (PIP) policies provide for payment of “all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery or rehabilitation.” Before this, the rates of reimbursement were limited only by what constituted “reasonable” and “customarily charge[d]” fees. Further, there was no cap on the amount of attendant care that could be provided by family.

Effective June 11, 2019, the Michigan Legislature enacted 2019 PA 21 and 2019 PA 22— both of which made significant amendments to the state’s No-Fault Act. Relevant here, 2019 PA 21 amended Michigan Statute § 500.3157 to include fee schedules limiting a medical provider’s reimbursement amount. The fee schedules went into effect on July 1, 2021.

This case specifically concerns Michigan Statute § 500.3157(7), which caps an insurance provider’s reimbursement for services not covered by Medicare to 55% of the fees charged as of January 1, 2019. Also at issue is MCL 500.3157(10), which limited the reimbursable hours of family-provided attendant care to 56 hours per week.


The plaintiffs suffered traumatic brain injuries in car accidents prior to June 11, 2019. Both are permanently disabled as a result of their respective accidents. One requires 24-hour in-home attendant care, and the other is a patient at a facility that provides inpatient living accommodations and rehabilitative services to those with traumatic brain injuries. Most of the services performed by the care facility are not compensable under Medicare.

The defendants are the insurers responsible for providing no-fault benefits to the plaintiffs. The plaintiffs asserted that because they were injured prior to the effective date of the 2019 Amendments and have vested contractual rights under the policy in effect when they were injured, they aren’t subject to the 2019 legislations’ limitations on benefits and payment contained in the statute. The defendants filed a motion for summary disposition under MCR 2.116(C)(8) (failure to state a claim). They argued that regardless of when the plaintiffs’ injuries occurred, they are subject to the newly enacted limitations. The trial court agreed with the defendants and granted them summary disposition. This appeal followed.


Judge Douglas B. Shapiro of the Michigan Court of Appeals addressed the question of whether the Legislature intended Michigan Statute § 500.3157(7) and (10) to apply retroactively to those injured before 2019 PA 21’s effective date.

Statutes and amendments of statutes are presumed to operate prospectively. To overcome this presumption, Judge Shapiro said that the Legislature must “clearly manifest an intent for retroactive application.” With this presumption against retroactive application of statutory amendments, courts typically apply the version of the no-fault act in effect at the time of the accident.

The defendants argued that the Legislature clearly stated its intention in 2019 amendments for the newly imposed limits contained within § 500.3157 to apply to those injured before their effective date. However, they failed to identify any language within the Michigan No-Fault Act stating this. The 2019 amendments provided an effective date of June 11, 2019 and contain no language referring to retroactive application.

On the date of the accidents, the recovery of PIP benefits for an injured person’s care, recovery, or rehabilitation was limited only by the reasonableness and necessity of the provider’s customary charges. These statutory provisions were expressly referenced or incorporated into the pre-amendment no-fault policies, Judge Shapiro explained. Therefore, insureds and those whose benefits are provided by their policies had a legitimate expectation that should they be injured in a motor vehicle accident, they’d receive unlimited lifetime benefits, so long as the charges were reasonable and the care reasonably necessary. These individuals “did not bargain for or contemplate,” that limits would be placed on the amount of attendant care family members can provide an injured person, or that treatment not compensable by Medicare would be limited to 55% reimbursement from the insurer. Moreover, the judge found that these new limitations didn’t create minor or collateral effects on those settled expectations; to the contrary, they directly and drastically limit the ability of motor vehicle accident victims to continue to obtain the care they require.

From the insurers’ perspective, Judge Shapiro opined that retroactive application would yield a windfall with no corresponding benefit to their insureds. The premiums and reserves for pre-amendment PIP policies were set by insurers based upon the risk that the persons covered might need lifetime care for catastrophic injuries. Put simply, Judge Shapiro wrote, “the insurers have already collected premiums in an amount sufficient to provide unlimited benefits, and to release them from that responsibility would substantially diminish their well-settled obligations under the pre-amendment no-fault scheme.”

The ongoing benefit claims in this case stem from motor vehicle accidents that occurred before the effective date of the revised statute, and the PIP policies covering the injured plaintiffs provided for unlimited benefits. The Court of Appeals therefore concluded that the amendments would substantially alter the “settled expectation[s]” and long-term reliance of auto accident victims. Again, the amended version of § 500.3157 contains no “clear, direct, and unequivocal” expression of intent to have subsections (7) and (10) apply retroactively— that is to say, to those injured before its effective date, even as to services provided after its effective date. Nor is such language found elsewhere in the amended no-fault act.

In addition, the Court of Appeals state that even if it were to conclude that the Legislature intended for 2019 PA 21 to apply retroactively to those injured before the amendments’ effective date, it would nonetheless hold that retroactive application violates the Contracts Clause of the Michigan Constitution.

Judge Markey dissented, contending that the 2019 amendments applied to all motor vehicle accidents, even those that occurred prior to the 2019 amendments. In addition, she believed the plaintiffs’ constitutional claims would fail.

The Court of Appeals affirmed in part, reversed in part, and remanded the case.

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