§2009.EXHIBIT A. Model COB Provisions

COORDINATION OF THE CONTRACT'S BENEFITS

WITH OTHER BENEFITS

 

I.          APPLICABILITY

 

A.        This Coordination of Benefits ("COB") provision applies to This Plan when an enrollee or the enrollee's covered dependent has health care coverage under more than one Plan.  "Plan" and "This Plan" are defined in Section II.

 

B.        If this COB provision applies, the order of benefit determination rules should be looked at first.  Those rules determine whether the benefits of This Plan are determined before or after those of another plan. The benefits of This Plan:

 

(1)        Shall not be reduced when, under the order of benefit determination rules, This Plan determines its benefits before another plan; but

 

(2)        May be reduced when, under the order of benefits determination rules, another plan determines its benefits first.  The reduction is described in Section IV "Effect on the Benefits of This Plan."

 

II.        DEFINITIONS

 

A.        "Plan" is any of the following that provides benefits or services for, or because of, medical or dental care or treatment:

 

(1)        Individual or group insurance or group-type coverage, whether insured or uninsured. This includes prepayment, group practice or individual practice coverage. It also includes coverage other than school accident-type coverage.

 

(2)        Coverage under a governmental plan, or coverage required or provided by law.  This does not include a state plan under Medicaid (Title XIX, Grants to States for Medical Assistance Programs, of the United States Social Security Act (42 USC 301 et seq.), as amended from time to time).

 

Each contract or other arrangement for coverage under (1) or (2) is a separate plan.  Also, if an arrangement has two parts and COB rules apply only to one of the two, each of the parts is a separate plan.

 

B.        "Plan" does not include:

 

(1)        Hospital indemnity coverage benefits or other fixed indemnity coverage;

 

(2)        Accident only coverage;

 

(3)        Specified disease or specified accident coverage;

 

(4)        Limited benefit health coverage;

 

(5)        School accident-type coverages that cover students for accidents only, including athletic injuries, either on a 24-hour basis or on a "to and from school" basis;

 

(6)        Benefits provided in long-term care insurance policies for nonmedical services, for example, personal care, adult day care, homemaker services, assistance with activities of daily living, respite care and custodial care, or for contracts that pay a fixed daily benefit without regard to expenses incurred or the receipt of services;

 

(7)        Medicare supplement policies;

 

(8)        A state plan under Medicaid;

 

(9)        A governmental plan that, by law, provides benefits that are in excess of those of any private insurance plan or other nongovernmental plan; or

 

(10)       Disability income protection coverage.

 

C.        "This Plan" is the part of the contract that provides benefits for health care expenses.

 

D.        "Primary Plan/Secondary Plan:"  The order of benefit determination rules state whether This Plan is a Primary Plan or Secondary Plan as to another  plan covering the person.

 

When This Plan is a Primary Plan, its benefits are determined before those of the other plan and without considering the other plan's benefits.

 

When This Plan is a Secondary Plan, its benefits are determined after those of the other plan and may be reduced because of the other plan's benefits.

 

When there are more than two plans covering the person, This Plan may be a Primary Plan as to one or more other plans, and may be a Secondary Plan as to a different plan or plans.

 

E.         "Allowable Expense" means a necessary, reasonable and customary item of expense for health care, when the item of expense is covered at least in part by one or more plans covering the person for whom the claim is made.

 

The difference between the cost of a private hospital room and the cost of a semi-private hospital room is not considered an Allowable Expense under this definition unless the patient's stay in a private hospital room is medically necessary either in terms of generally accepted medical practice or as specifically defined in the plan.

 

When a plan provides benefits in the form of services, the reasonable cash value of each service rendered will be considered both an Allowable Expense and a benefit paid.

 

F.         "Claim Determination Period" means a calendar year.  However, it does not include any part of a year during which a person has no coverage under This Plan, or any part of a year before the date this COB provision or a similar provision takes effect.

 

III.       ORDER OF BENEFIT DETERMINATION RULES

 

A.        General.  When there is a basis for a claim under This Plan and another plan, This Plan is a Secondary Plan that has its benefits determined after those of the other plan, unless:

 

(1)        The other plan has rules coordinating its benefits with those of This Plan; and

 

(2)        Both those rules and This Plan's rules (see Section III(B)), require that This Plan's benefits be determined before those of the other plan.

 

B.        Rules.  This Plan determines its order of benefits using the first of the following rules that applies:

 

(1)        Non-Dependent/Dependent.  The benefits of the plan that covers the person as an employee, member or subscriber (that is, other than as a dependent) are determined before those of the plan that covers the person as a dependent, except that, if the person is also a Medicare beneficiary, Medicare is:

 

(a)        Secondary to the plan covering the person as a dependent; and

 

(b)        Primary to the plan covering the person as other than a dependent, for example a retired employee.

 

(2)        Dependent Child/Parents not Separated or Divorced.  Except as stated in Section III(B)(3), when This Plan and another plan cover the same child as a dependent of a different person (i.e., "parent"):

 

(a)        The benefits of the plan of the parent whose birthday falls earlier in a year are determined before those of the plan of the parent whose birthday falls later in that year; but

 

(b)        If both parents have the same birthday, the benefits of the plan that covered the parent longer are determined before those of the plan that covered the other parent for a shorter period of time.

 

However, if the other plan does not have the rule described in Section III(B)(2)(a), but instead has a rule based upon the gender of the parent, and, if, as a result, the plans do not agree on the order of benefits, the rule in the other plan will determine the order of benefits.

 

(3)        Dependent Child/Separated or Divorced.  If two or more plans cover a person as a dependent child of divorced or separated parents, benefits for the child are determined in this order:

 

(a)        First, the plan of the parent with custody of the child;

 

(b)        Then, the plan of the spouse of the parent with custody of the child; and

 

(c)        Finally, the plan of the parent not having custody of the child.

 

However, if the specific terms of a court decree state that one of the parents is responsible for the health care expense of the child, and the entity obligated to pay or provide the benefits of the plan of that parent has actual knowledge of those terms, the benefits of that plan are determined first.  The plan of the other parent shall be the secondary plan.  This does not apply with respect to any Claim Determination Period or plan year during  which any benefits are actually paid or provided before the entity has that actual knowledge.

 

(4)        Dependent Child/Joint Custody.  If the specific terms of a court decree state that the parents shall share joint custody, without stating that one of the parents is responsible for the health care expenses of the child, the plans covering the child shall follow the order of benefit determination rules outlined in Section III(B)(2).

 

(5)        Active/Inactive Employee.  The benefits of a plan that covers a person as an employee who is neither laid off nor retired (or as that employee's dependent) are determined before those of a plan that covers that person as a laid-off or retired employee (or as that employee's dependent).  If the other plan does not have this rule and if, as a result, the plans do not agree on the order of benefits, this Section III(B)(5) shall not apply.

 

(6)        Continuation Coverage.  If a person whose coverage is provided under a right of continuation pursuant to federal or State law also is covered under another plan, the following shall be the order of benefit determination:

 

(a)        First, the benefits of a plan covering the person as an employee, member or subscriber (or as that person's dependent);

 

(b)        Second, the benefits under the continuation coverage.

 

If the other plan does not contain the order of benefits determination described in this Section III and if, as a result, the plans do not agree on the order of benefits, this requirement shall be ignored.

 

(7)        Longer/Shorter Length of Coverage.  If none of the rules in this Section III determines the order of benefits, the benefits of the plan that covered an employee, member or subscriber longer are determined before those of the Plan that covered that person for the shorter term.

 

IV.       EFFECT ON THE BENEFITS OF THIS PLAN

 

A.        When This Section Applies.  This Section IV applies when, in accordance with Section III "Order of Benefit Determination Rules", This Plan is a Secondary Plan as to one or more other plans.  In that event the benefits of This Plan may be reduced under this Section IV.  The other plan or plans are referred to as "the other plans" in Section IV(B).

 

B.        Reduction in This Plan's Benefits.

 

(1)        The benefits of This Plan will be reduced when:

 

(a)        The benefits that would be payable for the Allowable Expense under This Plan in the absence of this COB provision; and

 

(b)        The benefits that would be payable for the Allowable Expenses under the other plans, in the absence of provisions with a purpose like that of this COB provision, whether or not claim is made;

 

exceeds those Allowable Expenses in a Claim Determination Period.  In that case, the benefits of This Plan will be reduced so that they and the benefits payable under the other plans do not total more than those Allowable Expenses.

 

(2)       When the benefits of This Plan are reduced as described in Section IV(B)(1), each benefit is reduced in proportion.  It is then charged against any applicable benefit limit of This Plan.

 

V.        RIGHT TO RECEIVE AND RELEASE NEEDED INFORMATION

 

Certain facts are needed to apply these COB rules.  [Insurer] has the right to decide which facts it needs.  It may get needed facts from or give them to any other organization or person.  [Insurer] need not tell, or get the consent of, any person to do this.  Each person claiming benefits under This Plan must give [insurer] any facts it needs to pay the claim.

 

VI.       FACILITY OF PAYMENT

 

A payment made under another plan may include an amount that should have been paid under This Plan.  If it does, [insurer] may pay that amount to the organization that made the payment under the other plan.  That amount will then be treated as though it were a benefit paid under This Plan.  [Insurer] will not have to pay that amount again.  The term "payment made" includes providing benefits in the form of services, in which case "payment made" means reasonable cash value of the benefits provided in the form of services.

 

VII.     RIGHT OF RECOVERY

 

If the amount of the payments made by [insurer] is more than it should have paid under this COB provision, it may recover the excess from one or more of:

 

A.        The persons it has paid or for whom it has paid;

 

B.        Insurance companies; or

 

C.        Other organizations.

 

The "amount of the payments made" includes the reasonable cash value of any benefits provided in the form of services.

 

(Source:  Amended at 39 Ill. Reg. 12548, effective September 1, 2015)