Current through Register Vol. 50, No. 9, September 20, 2024
A. Model COB
Contract Provisions
COORDINATION OF THIS CONTRACTS BENEFITS WITH OTHER
BENEFITS
The Coordination of Benefits (COB) provision applies when a
person has health care coverage under more than one Plan. Plan is defined
below.
The order of benefit determination rules govern the order in
which each Plan will pay a claim for benefits. The Plan that pays first is
called the Primary plan. The Primary plan must pay benefits in accordance with
its policy terms without regard to the possibility that another Plan may cover
some expenses. The Plan that pays after the Primary plan is the Secondary plan.
The Secondary plan may reduce the benefits it pays so that payments from all
Plans do not exceed 100% of the total Allowable expense as provided for in
§303A.(a.-e.) of Regulation 32.
DEFINITIONS
A. A Plan is any of the following that
provides benefits or services for medical or dental care or treatment. If
separate contracts are used to provide coordinated coverage for members of a
group, the separate contracts are considered parts of the same plan and there
is no COB among those separate contracts.
(1)
Plan includes: group and nongroup insurance contracts, health maintenance
organization (HMO) contracts, closed panel plans or other forms of group or
group-type coverage (whether insured or uninsured); medical care components of
long-term care contracts, such as skilled nursing care; medical benefits under
group or individual automobile contracts; and Medicare or any other federal
governmental plan, as permitted by law.
(2) Plan does not include: hospital indemnity
coverage or other fixed indemnity coverage; accident only coverage; specified
disease or specified accident coverage; limited benefit health coverage, as
defined by state law; school accident type coverage except those enumerated in
LSA-R.S.
22:1000 A.3C; benefits for non-medical
components of long-term care policies; Medicare supplement policies; Medicaid
policies; or coverage under other federal governmental plans, unless permitted
by law.
Each contract for coverage under (1) or (2) is a separate
Plan. If a Plan has two parts and COB rules apply only to one of the two, each
of the parts is treated as a separate Plan.
B. This plan means, in a COB provision, the
part of the 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 contract providing health care benefits is
separate from this plan. A contract may apply one COB provision to certain
benefits, such as dental benefits, coordinating only with similar benefits, and
may apply another COB provision to coordinate other benefits.
C. The order of benefit determination rules
determine whether This plan is a Primary plan or Secondary plan when the person
has health care coverage under more than one Plan. When This plan is primary,
it determines payment for its benefits first before those of any other Plan
without considering any other Plans benefits. When This plan is secondary, it
determines its benefits after those of another Plan and may reduce the benefits
it pays so that all Plan benefits do not exceed 100% of the total Allowable
expense.
D. Allowable expense is a
health care service or expense, including deductibles, coinsurance and
copayments, that is covered in full or at least in part by any Plan covering
the person. When a Plan provides benefits in the form of services, the
reasonable cash value of each service will be considered an Allowable expense
and a benefit paid. An expense or service that is not covered by any Plan
covering the person is not an Allowable expense.
The following are examples of expenses that are and are not
an Allowable expenses:
(1) The
difference between the cost of a semi-private hospital room and a private
hospital room is not an Allowable expense, unless one of the Plans provides
coverage for private hospital room expenses.
(2) If a person is covered by 2 or more Plans
that compute their benefit payments on the basis of usual and customary fees or
relative value schedule reimbursement methodology or other similar
reimbursement methodology, any amount in excess of the highest reimbursement
amount for a specific benefit is not an Allowable expense.
(3) If a person is covered by 2 or more Plans
that provide benefits or services on the basis of negotiated fees, an amount in
excess of the highest of the negotiated fees is not an Allowable
expense.
(4) If a person is covered
by one Plan that calculates its benefits or services on the basis of usual and
customary fees or relative value schedule reimbursement methodology or other
similar reimbursement methodology and another Plan that provides its benefits
or services on the basis of negotiated fees, the Primary plans payment
arrangement shall be the Allowable expense for all Plans.
(5) The amount of any benefit reduction by
the Primary plan because a covered person has failed to comply with the Plan
provisions is not an Allowable expense. Examples of these types of plan
provisions include second surgical opinions, precertification of admissions,
and preferred provider arrangements.
E. Closed panel plan is a Plan that provides
health care benefits to covered persons primarily in the form of services
through a panel of providers that have contracted with or are employed by the
Plan, and that excludes coverage for services provided by other providers,
except in cases of emergency or referral by a panel member.
F. Custodial parent is the parent awarded
custody by a court decree or, in the absence of a court decree, is the parent
with whom the child resides more than one half of the calendar year excluding
any temporary visitation.
ORDER OF BENEFIT DETERMINATION RULES
When a person is covered by two or more Plans, the rules for
determining the order of benefit payments are as follows:
A. The Primary plan pays or provides its
benefits according to its terms of coverage and without regard to the benefits
of under any other Plan.
(1) Except as
provided in Paragraph (2), a Plan that does not contain a coordination of
benefits provision that is consistent with this regulation is always primary
unless the provisions of both Plans state that the complying plan is
primary.
(2) Coverage that is
obtained by virtue of membership in a group that is designed to supplement a
part of a basic package of benefits and provides that this supplementary
coverage shall be excess to any other parts of the Plan provided by the
contract holder. Examples of these types of situations are major medical
coverages that are superimposed over base plan hospital and surgical benefits,
and insurance type coverages that are written in connection with a Closed panel
plan to provide out-of-network benefits.
B. A Plan may consider the benefits paid or
provided by another Plan in calculating payment of its benefits only when it is
secondary to that other Plan.
C.
Each Plan determines its order of benefits using the first of the following
rules that apply:
(1) Non-Dependent or
Dependent. The Plan that covers the person other than as a dependent, for
example as an employee, member, policyholder, subscriber or retiree is the
Primary plan and the Plan that covers the person as a dependent is the
Secondary plan. However, if the person is a Medicare beneficiary and, as a
result of federal law, Medicare is secondary to the Plan covering the person as
a dependent; and primary to the Plan covering the person as other than a
dependent (e.g. a retired employee); then the order of benefits between the two
Plans is reversed so that the Plan covering the person as an employee, member,
policyholder, subscriber or retiree is the Secondary plan and the other Plan is
the Primary plan.
(2) Dependent
Child Covered Under More Than One Plan. Unless there is a court decree stating
otherwise, when a dependent child is covered by more than one Plan the order of
benefits is determined as follows:
(a) For a
dependent child whose parents are married or are living together, whether or
not they have ever been married:
The Plan of the parent whose birthday falls earlier in the
calendar year is the Primary plan; or
If both parents have the same birthday, the Plan that has
covered the parent the longest is the Primary plan.
(b) For a dependent child whose parents are
divorced or separated or not living together, whether or not they have ever
been married:
(i) If a court decree states
that one of the parents is responsible for the dependent childs health care
expenses or health care coverage and the Plan of that parent has actual
knowledge of those terms, that Plan is primary. This rule applies to plan years
commencing after the Plan is given notice of the court decree;
(ii) If a court decree states that both
parents are responsible for the dependent childs health care expenses or health
care coverage, the provisions of Subparagraph (a) above shall determine the
order of benefits;
(iii) If a court
decree states that the parents have joint custody without specifying that one
parent has responsibility for the health care expenses or health care coverage
of the dependent child, the provisions of Subparagraph (a) above shall
determine the order of benefits; or
(iv) If there is no court decree allocating
responsibility for the dependent childs health care expenses or health care
coverage, the order of benefits for the child are as follows:
(a.) The Plan covering the Custodial
parent;
(b.) The Plan covering the
spouse of the Custodial parent;
(c.) The Plan covering the non-custodial
parent; and then
(d.) The Plan
covering the spouse of the non-custodial parent.
(c) For a dependent child covered
under more than one Plan of individuals who are the parents of the child, the
provisions of Subparagraph (a) or (b) above shall determine the order of
benefits as if those individuals were the parents of the child.
(d) For a dependent child covered under
spouses plan
(i) For a dependent child who has
coverage under either or both parents plans and also has his or her own
coverage as a dependent under a spouses plan, the rule in Paragraph (5)
applies.
(ii) In the event the
dependent childs coverage under the spouses plan began on the same date as the
dependent childs coverage under either or both parents plans, the order of
benefits shall be determined by applying the birthday rule in Subparagraph (a)
to the dependent childs parent(s) and the dependents spouse.
(3) Active Employee or
Retired or Laid-off Employee. The Plan that covers a person as an active
employee, that is, an employee who is neither laid off nor retired, is the
Primary plan. The Plan covering that same person as a retired or laid-off
employee is the Secondary plan. The same would hold true if a person is a
dependent of an active employee and that same person is a dependent of a
retired or laid-off employee. If the other Plan does not have this rule, and as
a result, the Plans do not agree on the order of benefits, this rule is
ignored. This rule does not apply if the rule labeled D(1) can determine the
order of benefits.
(4) COBRA or
State Continuation Coverage. If a person whose coverage is provided pursuant to
COBRA or under a right of continuation provided by state or other federal law
is covered under another Plan, the Plan covering the person as an employee,
member, subscriber or retiree or covering the person as a dependent of an
employee, member, subscriber or retiree is the Primary plan and the COBRA or
state or other federal continuation coverage is the Secondary plan. If the
other Plan does not have this rule, and as a result, the Plans do not agree on
the order of benefits, this rule is ignored. This rule does not apply if the
rule labeled D(1) can determine the order of benefits.
(5) Longer or Shorter Length of Coverage. The
Plan that covered the person as an employee, member, policyholder, subscriber
or retiree longer is the Primary plan and the Plan that covered the person the
shorter period of time is the Secondary plan.
(6) If the preceding rules do not determine
the order of benefits, the Allowable expenses shall be shared equally between
the Plans meeting the definition of Plan. In addition, This plan will not pay
more than it would have paid had it been the Primary plan.
EFFECT ON THE BENEFITS OF THIS PLAN
A. When this plan is secondary, it may reduce
its benefits so that the total benefits paid or provided by all Plans during a
plan year are not more than the total Allowable expenses. In determining the
amount to be paid for any claim, the Secondary plan will calculate the benefits
it would have paid in the absence of other health care coverage and apply that
calculated amount to any Allowable expense under its Plan that is unpaid by the
Primary plan. The Secondary plan may then reduce its payment by the amount so
that, when combined with the amount paid by the Primary plan, the total
benefits paid or provided by all Plans for the claim do not exceed the total
Allowable expense for that claim. In addition, the Secondary plan shall credit
to its plan deductible, coinsurance, copayments and any amounts it would have
credited to its deductible in the absence of other health care
coverage.
B. If a covered person is
enrolled in two or more Closed panel plans and if, for any reason, including
the provision of service by a non-panel provider, benefits are not payable by
one Closed panel plan, COB shall not apply between that Plan and other Closed
panel plans.
C. Effect on the
Benefits of This Plan
1. When this plan is
secondary, it may reduce its benefits so that the total benefits paid or
provided by all plans during a plan year or claim determination period are not
more than 100 percent of total allowable expenses. The difference between the
benefit payments that this plan would have paid had it been the primary plan,
and the benefit payments that it actually paid or provided shall be recorded as
a benefit reserve for the covered person and used by this plan to pay any
allowable expenses, not otherwise paid during the claim determination period.
As each claim is submitted, this plan will:
a.
determine its obligation to pay or provide benefits under its
contract;
b. determine whether a
benefit reserve has been recorded for the covered person; and
c. determine whether there are any unpaid
allowable expenses during that claims determination period.
2. If there is a benefit reserve,
the secondary plan will use the covered person's benefit reserve to pay up to
100 percent of total allowable expenses incurred during the claim determination
period. At the end of the claims determination period, the benefit reserve
returns to zero. A new benefit reserve must be created for each new claim
determination period.
3. If a
covered person is enrolled in two or more closed panel plans, and if for any
reason, including the provision of service by a nonpanel provider, benefits are
not payable by one closed panel plan, COB shall not apply between that plan and
other closed panel plans.
RIGHT TO RECEIVE AND RELEASE NEEDED
INFORMATION
Certain facts about health care coverage and services are
needed to apply these COB rules and to determine benefits payable under This
plan and other Plans. [Organization responsibility for COB administration] may
get the facts it needs from or give them to other organizations or persons for
the purpose of applying these rules and determining benefits payable under This
plan and other Plans covering the person claiming benefits. [Organization
responsibility for COB administration] need not tell, or get the consent of,
any person to do this. Each person claiming benefits under This plan must give
[Organization responsibility for COB administration] any facts it needs to
apply those rules and determine benefits payable.
FACILITY OF PAYMENT
A payment made under another Plan may include an amount that
should have been paid under This plan. If it does, [Organization responsibility
for COB administration] may pay that amount to the organization that made that
payment. That amount will then be treated as though it were a benefit paid
under This plan. [Organization responsibility for COB administration] 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 the
reasonable cash value of the benefits provided in the form of services.
RIGHT OF RECOVERY
If the amount of the payments made by [Organization
responsible for COB administration] is more than it should have paid under this
COB provision, it may recover the excess from one or more of the persons it has
paid or for whom it has paid; or any other person or organization that may be
responsible for the benefits or services provided for the covered person. The
"amount of the payments made" includes the reasonable cash value of any
benefits provided in the form of services.
AUTHORITY NOTE:
Promulgated in accordance with R.S. 22:3.2014.
