Louisiana Administrative Code
Title 37 - INSURANCE Part
Part XIII - Regulations
Chapter 3 - Regulation 32-Coordination of Benefits
Section XIII-309 - Procedure to be Followed by Secondary Plan

Universal Citation: LA Admin Code XIII-309

Current through Register Vol. 50, No. 9, September 20, 2024

A. When a plan is secondary, it shall reduce its benefits so that the total benefits paid or provided by all plans during a claim determination period or plan year are not more than 100 percent of total allowable expenses as provided for in §303 A, Allowable Expense, a-e. The secondary plan shall calculate its savings by subtracting the allowable expense amount as provided for in §303 A, Allowable Expense, a-e that it paid as a secondary plan from the allowable expense amount provided for §303 A, Allowable Expense, a-e that it would have paid had it been primary. These savings shall be recorded as a benefit reserve for the covered person and shall be used by the secondary plan to pay any allowable expenses, not otherwise paid, that are incurred by the covered person during the claim determination period. (See Appendix C, Explanation for Secondary Plans on the Purpose and Use of the Benefit Reserve.) As each claim is submitted, the secondary plan must:

1. determine its obligation, pursuant to its contract;

2. determine whether a benefit reserve has been recorded for the covered person; and

3. determine whether there are any unpaid allowable expenses during that claims determination period.

B. If there is a benefit reserve, the secondary plan shall use the covered person's recorded benefit reserve to pay up to 100 percent of total allowable expenses as provided for in §303 A, Allowable Expense, a-e incurred during the claim determination period. At the end of the claim determination period the benefit reserve returns to zero. A new benefit reserve must be created for each new claim determination period.

C. The benefits of the secondary plan shall be reduced when the sum of the benefits that would be payable for the allowable expenses as provided for in §303 A, Allowable Expense, a-e under the secondary plan in the absence of this COB provision and the benefits that would be payable for the allowable expenses as provided for in §303 A, Allowable Expense, a-e under the other plans, in the absence of provisions with a purpose like that of this COB provision, whether or not a claim is made, exceeds the allowable expenses in a claim determination period. In that case, the benefits of the secondary plan shall be reduced so that they and the benefits payable under the other plans do not total more than the allowable expenses as provided for in §303 A, Allowable Expense, a-e.

1. When the benefits of a plan are reduced as described above, each benefit is reduced in proportion. It is then charged against any applicable benefit limit of the plan.

2. The requirements of Paragraph 1 of this Subsection do not apply if the plan provides only one benefit, or may be altered to suit the coverage provided.

AUTHORITY NOTE: Promulgated in accordance with R.S. 22:3.2014.

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