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New Jersey Mfrs. Ins. Co. v. Longo

July 21, 1997


On appeal from the Superior Court of New Jersey, Law Division, Mercer County.

Approved for Publication July 21, 1997, Decided

Before Judges Havey and Cuff. The opinion of the court was delivered by Cuff, J.A.D.

The opinion of the court was delivered by: Cuff

The opinion of the court was delivered by


The issue presented by this appeal is whether a personal automobile insurer may impose an additional deductible and additional premium when an insured chooses his health insurance as a primary option pursuant to N.J.S.A. 39:6-4.3, but a covered person under both policies (automobile and health) receives treatment from health care providers who did not participate with the insured's primary health care insurance program. Plaintiff New Jersey Manufacturers Insurance Company (NJM) appeals from an order denying its motion for summary judgment and declaring that it had no authority to impose an additional deductible of $750 and an additional premium. We reverse.

The facts are undisputed. NJM issued an automobile liability insurance policy to Donald Longo which was effective January 9, 1991 to January 9, 1992. Mr. Longo selected his private health insurer as the primary insurer for medical expenses arising from an automobile accident involving himself and his family members living in his household. In return, he received a twenty-five percent reduction in his personal injury protection (PIP) benefits premium.

On December 3, 1991, defendant Lisa Longo, Mr. Longo's daughter and a resident of his household, was involved in an automobile accident. She alleges that she sustained injuries in this accident. She was driving a vehicle insured under her father's policy with NJM at the time of the accident.

Mr. Longo's primary health insurer was Aetna Health Plans of New Jersey, Inc. (Aetna). Aetna provides coverage for eligible medical services when care is ordered by an Aetna primary care physician or by a specialist within the Aetna network. Although there is no allegation that physicians in the Aetna network could not provide the medical services required by Ms. Longo, she obtained medical treatment from physicians outside of the Aetna network. Her claim for benefits through Aetna was denied.

Ms. Longo then sought PIP benefits through her father's NJM automobile policy. As required by statute, NJM paid those medical expenses incurred at the out-of-network providers, except for $27 which represented the PIP premium Ms. Longo's father would have paid if he had not selected Aetna as the primary health care insurer and a $750 deductible.

NJM's motion for summary judgment was denied. In her April 23, 1996 oral opinion, the motion Judge found that Ms. Longo was eligible for health care benefits under the Aetna plan. She also found that the providers in the Aetna network could have provided the medical care required by Ms. Longo. Nevertheless, the motion Judge concluded that neither the governing statute nor the implementing regulations authorize NJM to impose the additional premium or to apply the deductible.

The Legislature has long sought a means to contain the high cost of automobile insurance in this State. In 1990, the Legislature enacted the Fair Automobile Insurance Reform Act of 1990, L. 1990, c. 8, which made significant changes to the law governing PIP benefits. One such change allowed an insured to designate his automobile insurer or his health insurance carrier as the primary source of benefits for medical benefits resulting from an automobile accident. This amendment, codified at N.J.S.A. 39:6A-4.3, provides:

With respect to personal injury protection coverage provided on an automobile ... the automobile insurer shall provide the following coverage options:

d. For policies issued or renewed on or after January 1, 1991, the option that other health insurance coverage or benefits of the insured, including health care services provided by a health maintenance organization and any coverage or benefits provided under any federal or State program, are the primary coverage in regard to medical expense benefits pursuant to Section 4 of P.L. 1972, c. 70 (C. 39:6A-4). If health insurance coverage or benefits are primary, an automobile insurer providing medical expense benefits under personal injury protection coverage, shall be liable ...

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