Current through Reg. 50, No. 13; March 28, 2025
(a)
Coverage by two or more plans. When a person is covered by two or more plans,
the rules for determining the order of benefit payments will be determined as
provided in paragraphs (1) - (5) of this subsection.
(1) The primary plan must pay or provide its
benefits as if the secondary plan or plans did not exist.
(2) A plan may take into consideration the
benefits paid or provided by another plan only when, under this subchapter, it
is secondary to that other plan.
(3) If the primary plan is a closed panel
plan and the secondary plan is not, the secondary plan must pay or provide
benefits as if it were the primary plan when a covered person uses a
noncontracted health care provider or physician, except for emergency services
or authorized referrals that are paid or provided by the primary
plan.
(4) When multiple contracts
providing coordinated coverage are treated as a single plan under this
subchapter, this section applies only to the plan as a whole, and coordination
among the component contracts is governed by the terms of the contracts. If
more than one carrier pays or provides benefits under the plan, the carrier
designated as primary within the plan must be responsible for the plan's
compliance with this subchapter.
(5) If a person is covered by more than one
secondary plan, the order of benefit determination rules of this subchapter
decide the order in which secondary plans' benefits are determined in relation
to each other. Each secondary plan must take into consideration the benefits of
the primary plan or plans and the benefits of any other plan, that, under the
rules of this subchapter, has its benefits determined before those of that
secondary plan.
(b)
Exception. Except as provided by subsection (c) of this section and §
3.3509(b) of
this title (relating to Miscellaneous Provisions), a plan that does not contain
order of benefit determination provisions that are consistent with this
subchapter is always the primary plan unless the provisions of both plans state
that the complying plan is primary.
(c) Coverage by membership in a group.
Coverage that is obtained by virtue of membership in a group and designed to
supplement a part of a basic package of benefits may provide that the
supplementary coverage must 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.
(d) Order of benefit determination. Each plan
determines its order of benefits using the first of the following rules that
apply.
(1) Nondependent or dependent.
(A) Subject to this subparagraph and
subparagraph (B) of this paragraph, the plan that covers the person other than
as a dependent, for example, as an employee, member, subscriber, policyholder,
certificate holder, or retiree, is the primary plan, and the plan that covers
the person as a dependent is the secondary plan.
(B) If the person is a Medicare beneficiary,
subparagraph (C) of this paragraph applies if, and as a result of the
provisions of Title XVIII of the Social Security Act and implementing
regulations, Medicare is:
(i) secondary to
the plan covering the person as a dependent; and
(ii) primary to the plan covering the person
as other than a dependent, for example, a retired employee.
(C) Under subparagraph (B) of this
paragraph, as applicable, the order of benefits is reversed so that the plan
covering the person as an employee, member, subscriber, policyholder,
certificate holder, or retiree is the secondary plan and the other plan
covering the person as a dependent is the primary plan.
(2) Dependent child covered under more than
one plan. Unless there is a court order stating otherwise, plans covering a
dependent child must determine the order of benefits using the following rules
that apply.
(A) For a dependent child whose
parents are married or are living together, whether or not they have ever been
married:
(i) the plan of the parent whose
birthday falls earlier in the calendar year is the primary plan; or
(ii) if both parents have the same birthday,
the plan that has covered the parent longest is the primary plan.
(B) For a dependent child whose
parents are divorced or are not living together, whether or not they have ever
been married:
(i) if a court order states that
one of the parents is responsible for the dependent child's health care
expenses or health care coverage, and the plan of that parent has actual
knowledge of those terms, that plan is primary. If the parent with
responsibility has no health care coverage for the dependent child's health
care expenses, and that parent's spouse does, then the spouse's plan is the
primary plan. This clause must not apply with respect to any plan year during
which benefits are paid or provided before the entity has actual knowledge of
the court order provision.
(ii) if
a court order states that both parents are responsible for the dependent
child's health care expenses or health care coverage, the provisions of
subparagraph (A) of this paragraph must determine the order of
benefits.
(iii) if a court order
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) of this paragraph must
determine the order of benefits.
(iv) if there is no court order allocating
responsibility for the child's health care expenses or health care coverage,
the order of benefits for the child is as follows:
(I) the plan covering the custodial
parent;
(II) the plan covering the
custodial parent's spouse;
(III)
the plan covering the noncustodial parent; then
(IV) the plan covering the noncustodial
parent's spouse.
(C) For a dependent child covered under more
than one plan of individuals who are not the parents of the child, the order of
benefits must be determined, as applicable, under subparagraph (A) or (B) of
this paragraph as if the individuals were parents of the child.
(D) For a dependent child who has coverage
under either or both parents' plans and has his or her own coverage as a
dependent under a spouse's plan, subsection (e) of this section
applies.
(E) In the event the
dependent child's coverage under the spouse's plan began on the same date as
the dependent child's coverage under either or both parents' plans, the order
of benefits must be determined by applying the birthday rule in subparagraph
(A) of this paragraph to the dependent child's parent(s) and the dependent's
spouse.
(3) Active
employee, retired, or laid-off employee.
(A)
The plan that covers a person as an active employee who is neither laid off nor
retired, or as a dependent of an active employee, is the primary plan. The plan
that covers that same person as a retired or laid-off employee or as a
dependent of a retired or laid-off employee is the secondary plan.
(B) If the plan that covers the same person
as a retired or laid-off employee or as a dependent of a retired or laid-off
employee does not conform to the requirements of subparagraph (A) of this
paragraph, and as a result, the plans do not agree on the order of benefits,
this paragraph does not apply.
(C)
This paragraph does not apply if paragraph (1) of this subsection can determine
the order of benefits.
(4) COBRA or state continuation coverage.
(A) If a person whose coverage is provided
under COBRA or under a right of continuation under 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 plan
covering that same person under COBRA or under a right of continuation under
state or other federal law is the secondary plan.
(B) If the plan that covers the same person
under COBRA or under a right of continuation does not conform to the
requirements of subparagraph (A) of this paragraph, and as a result, the plans
do not agree on the order of benefits, this paragraph does not apply.
(C) This paragraph does not apply if
paragraph (1) of this subsection can determine the order of benefits.
(e) Length of time. If
subsection (d) of this section does not determine the order of benefits, the
plan that has covered the person for the longer period of time is the primary
plan. The plan that has covered the person for the shorter period of time is
the secondary plan.
(1) To determine the
length of time a person has been covered under a plan, two successive plans
must be treated as one if the covered person was eligible under the second plan
within 24 hours after the first plan ended.
(2) The start of a new plan does not include:
(A) a change in the amount or scope of a
plan's benefits;
(B) a change in
the entity that pays, provides, or administers the plan's benefits;
or
(C) a change from one type of
plan to another, such as, from a single employer plan to a multiple employer
plan.
(3) The person's
length of time covered under a plan is measured from the person's first date of
coverage under that plan. If that date is not readily available for a group
plan, the date the person first became a member of the group must be used as
the date from which to determine the length of time the claimant's coverage
under the present plan has been in force.
(f) Sharing equally between the plans. If
subsections (a) - (e) of this section do not determine the order of benefits,
the allowable expenses must be shared equally between the plans.