Current through Register Vol. 28, No. 3, September 1, 2024
3.1 The following words and terms, when used in this regulation, shall have the following meanings unless the context clearly indicates otherwise.
3.2 "Allowable Expense(s)" means the necessary, reasonable and customary item of expense for health care when the item of expense is covered at least in part under any of the plans involved, except where a statute requires a different definition.
3.2.1 Notwithstanding the above definition, items of expense under coverages such as dental care, vision care, prescription drug or hearing aid programs may be excluded from the definition of Allowable Expense. A plan which provides benefits only for any such items of expense may limit its definition of Allowable Expenses to like items of expense.
3.2.2 When a plan provides benefits in the form of service, the reasonable cash value of each service will be considered as both an Allowable Expense and a benefit paid.
3.2.3 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 the above definition unless the patient's stay in a private hospital room is medically necessary in terms of generally accepted medical practice.
3.2.4 When COB is restricted in its use to specific coverage in a contract (for example, major medical or dental), the definition of "Allowable Expense" must include the corresponding expenses or services to which COB applies.
3.3 "Claim" means a request that benefits of a plan be provided or paid is a claim. The benefits claimed may be in the form of:
3.3.1 services (including supplies);
3.3.2 payment for all or a portion of the expenses incurred;
3.3.3 a combination of sections 3.3.1 and 3.3.2 above; or
3.3.4 an indemnification.
3.4 "Claim Determination Period" is the period of time, which must not be less than twelve consecutive months, over which Allowable Expenses are compared with total benefits payable in the absence of COB, to determine whether overinsurance exists and how much each plan will pay or provide.
3.4.1 The Claim Determination Period is usually a calendar year, but a plan may use some other period of time that fits the coverage of the group contract. A person may be covered by a plan during a portion of a Claim Determination Period if that person's coverage starts or ends during the Claim Determination Period.
3.4.2 As each claim is submitted, each plan is to determine its liability and pay or provide benefits based upon Allowable Expenses incurred to that point in the Claim Determination Period. But that determination is subject to adjustment as later Allowable Expenses are incurred in the same Claim Determination Period.
3.5 "Coordination of Benefits" is a provision establishing an order in which plans pay their claims.
3.6 "Hospital Indemnity Benefits" are benefits not related to expenses incurred. The term does not include reimbursement-type benefits even if they are designed or administered to give the insured the right to elect indemnity-type benefits at the time of claim.
3.7 "Plan" means a form of coverage with which coordination is allowed. The definition of Plan in the group contract must state the types of coverage which will be considered in applying the COB provision of that contract. The right to include a type of coverage is limited by the rest of this definition.
3.7.1 The definition shown in the Model COB Provision, attached to this rule as Appendix A, is an example of what may be used. Any definition that satisfies this subsection may be used.
3.7.2 When describing a plan, an insurer may use the term "program" or other similar term to describe the coverage under a plan.
3.7.3 Plan may include:
3.7.3.1 Group insurance and group subscriber contracts;
3.7.3.2 Uninsured arrangements of group or group-type coverage;
3.7.3.3 Group or group-type coverage through HMOs and other prepayment, group practice and individual practice plans;
3.7.3.4 Group-type contracts. Group-type contracts are contracts which are not available to the general public and can be obtained and maintained only because of membership in or connection with a particular organization or group. Group-type contracts answering this description may be included in the definition of plan, at the option of the insurer or the service provider and the contract client, whether or not uninsured arrangements or individual contract forms are used and regardless of how the group-type coverage is designated (for example, "franchise" or "blanket"). Individually underwritten and issued guaranteed renewable policies would not be considered "group-type" even savings to the insured since the insured would have the right to maintain or renew the policy independently of continued employment with the employer.
3.7.3.5 The amount by which group or group-type hospital indemnity benefits exceed $100 per day;
3.7.3.6 The medical benefits coverage in group, group-type and individual automobile "no fault" and traditional automobile "fault" type contracts; and
3.7.3.7 Medicare or other governmental benefits, except as provided in section 3.7.3.8.7 below. That part of the definition of plan may be limited to the hospital, medical and surgical benefits of the governmental program.
3.7.3.8 Plan shall not include:
3.7.3.8.1 Individual or family insurance contracts;
3.7.3.8.2 Individual or family subscriber contracts;
3.7.3.8.3 Individual or family coverage through Health Maintenance Organizations (HMOs);
3.7.3.8.4 Individual or family coverage under other prepayment, group practice and individual practice plans;
3.7.3.8.5 Group or group-type hospital indemnity benefits of $100.00 per day or less;
3.7.3.8.6 School accident-type coverages. These contracts cover grammar, high school and college students for accidents only, including athletic injuries, either on a 24-hour basis or on a "to and from school" basis; and
3.7.3.8.7 A State plan under Medicaid, and shall not include a law or plan when, by law, its benefits are in excess of those of any private insurance plan or other non-governmental plan.
3.8 "Primary Plan" is a plan whose benefits for a person's health care coverage must be determined without taking the existence of any other plan into consideration. A plan is a Primary Plan if either of the following conditions is true:
3.8.1 The plan either has no order of benefit determination rules, or it has rules which differ from those permitted by this subchapter. There may be more than one Primary Plan; or
3.8.2 All plans which cover the person use the order of benefit determination rules required by this regulation, and under those rules the plan determines its benefits first.
3.9 "Secondary Plan" is a plan which is not a Primary Plan. If a person is covered by more than one Secondary Plan, the order of benefit determination rules of this regulation decide the order in which their benefits are determined in relation to each other. The benefits of each Secondary Plan may take into consideration the benefits of the Primary Plan or plans and the benefits of any other plan which, under the rules of this regulation, has its benefits determined before those of that Secondary Plan.
3.10 "This Plan" in a COB provision, refers to the part of the group contract providing the health care benefits to which the COB provision applies and which may be reduced because of the benefits of other plans. Any other part of the group contract providing health care benefits is separate from This Plan. A group contract may apply one COB provision to certain of its benefits (such as dental benefits), coordinating only with like benefits, and may apply other separate COB provisions to coordinate other benefits.
