West Virginia Code of State Rules
Agency 114 - Insurance Commission
Title 114 - LEGISLATIVE RULE INSURANCE COMMISSIONER
Series 114-28 - Coordination Of Health Benefits
Appendix A - MODEL COB PROVISIONS
COORDINATION OF THIS CONTRACT'S BENEFITS WITH OTHER BENEFITS
I. APPLICABILITY
A. The Coordination of Benefits ("COB") provision applies when a person has health care coverage under more than one plan. "Plan" is defined below.
B. 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 one-hundred percent (100%) of the total allowable expense.
II. DEFINITIONS
A. "Plan" is any of these which 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. "Plan" also includes 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, school accident type coverage, 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.
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 state whether this plan is a primary plan or a secondary plan when the person has health care coverage under more than one plan.
1. 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.
2. 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 and may reduce the benefits it pays so that all plan benefits do not exceed one-hundred percent (100%) of the total allowable expense.
D. "Allowable Expense" is a health care expense, including deductibles, coinsurance and copayments, that is covered at least in part by a 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 that is not covered by any plan covering the person is not an allowable expense. In addition, any expense that a provider by law or in accordance with a contractual agreement is prohibited from charging a covered person is not an allowable expense.
1. The following are examples of expenses that are not allowable expenses:
(a) The difference between the cost of a private hospital room and the cost of a semi-private hospital room is not an allowable expense unless one of the plans provides coverage for private hospital room expenses.
(b) If a person is covered by two (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.
(c) If a person is covered by two (2) or more plans that provide benefit payment on the basis of negotiated fees, an amount in excess of the highest of the negotiated fees is not an allowable expense.
(d) 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 plan's payment arrangement shall be the allowable expense for all plans. However, if the provider has contracted with the secondary plan to provide the benefit or service for a specific negotiated fee or payment amount that is different than the primary plan's payment arrangement and if the provider's contract permits, the negotiated fee or payment shall be the allowable expense used by the secondary plan to determine its benefits.
(e) 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.
III. 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 under any other plan.
B.
1. Except as provided in paragraph (2) below, a plan that does not contain a coordination of benefits that is consistent with this rule 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 coverage that are written in connection with a closed panel plan to provide out-of-network benefits.
C. A plan may consider the benefits paid or provided by another plan in calculation payment of its benefits only with it is secondary to that other plan.
D. Each plan determines its order of benefits using the first of the following rules that apply:
1. Non-Dependent/Dependent. The plan which covers the person other than as 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:
(1) The plan of the parent whose birthday falls earlier in a calendar year is the primary plan; or
(2) 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 separated or not living together, whether or not they have ever been married:
(1) If there is no court decree allocating responsibility for the dependent child's health care expenses or health care coverage, the order of benefits for the child are as follows:
(i) The plan of the parent with custody of the child;
(ii) The plan of the spouse of the parent with the custody of the child;
(iii) The plan of the parent not having custody of the child; and
(iv) The plan of the spouse of the parent not having custody of the child;
(2) If the specific terms of a court decree state that one of the parents is responsible for the health care expenses of the dependent child, 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;
(3) If a court decree states that both parents are responsible for the dependent child's health care expenses or health care coverage, the provisions of (a) above shall determine the order of benefits.
(4) If the court decree states that the parents have joint custody, without stating that one of the parents is responsible for the health care expenses of the dependent child, the provisions of (a) above shall determine the order of benefits.
(c) For a dependent child covered under more than one plan of individuals who are not the parents of the child, the provisions of (a) or (b) above shall determine the order of benefits as if those individuals were the parents of the child.
3. Active Employees 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 this rule is ignored. This rule does not apply if the rule labeled D(1) of this section 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 plans do 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) of this section can determine the order of benefits.
5. Longer or Shorter Length of Coverage. The plan which that covered a person as an employee, member, subscriber or retiree longer is the primary plan and the plan which covered that person for 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.
IV. EFFECT ON THE BENEFITS OF THIS PLAN
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 another 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. It addition, the secondary plan shall credit to its plan deductible any amounts it would have credited to its deductible in the absence of other health care coverage.
V. RIGHT TO RECEIVE AND RELEASE NEEDED INFORMATION
Certain facts about health care coverage are needed to apply these COB rules and to determine benefits payable under this plan and other plans. [Organization responsible for COB administration] may get needed facts from or give them to any other organization or person to the extent reasonably necessary to apply these rules and to determine benefits payable under this plan and other plans covering the person claiming benefits. [Organization responsible 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 responsible for COB administration] any facts it needs to apply those rules and determine benefits payable.
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, [Organization responsible 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 responsible 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 reasonable cash value of the benefits provided in the form of services.
VII. 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.
