Illinois Administrative Code › Title 50 - INSURANCE › Part 2009 - COORDINATION OF BENEFITS › Section 2009.20 - Definitions

Current through Register Vol. 48, No. 28, July 12, 2024
The following words and terms, when used in this Part, shall
				have the following meanings unless the context clearly indicates
				otherwise:
"Allowable Expense" 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. Necessary, reasonable, and
				customary item of expense for health care shall be defined in the
				policy.
Notwithstanding this 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 that
				provides benefits only for any such items of expense may limit its definition
				of allowable expenses to like items of expense.
When a plan provides benefits in the form of service, the
				reasonable cash value, as determined by the insurer based on the value placed
				on that service in the geographic area, will be considered as both an allowable
				expense and a benefit paid.
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 this definition unless the patient's stay in a private hospital room is
				medically necessary, as determined by the physicians of record.
When COB is restricted in its use to specific coverage in a
				contract (for example, major medical or dental), "allowable expense" must
				include the corresponding expenses or services to which COB applies.
When benefits are reduced under a primary plan because a
				covered person does not comply with the plan provisions, the amount of the
				reduction shall not be considered an allowable expense. Examples of these
				provisions are those related to second surgical opinions, precertification of
				admissions or services, and preferred provider arrangements.
Only benefit reductions based upon provisions similar in
				purpose to those described in this definition and contained in the primary plan
				may be excluded from allowable expenses.
This provision shall not be used by a second plan to refuse to
				pay benefits because an HMO member has elected to have health care services
				provided by a non-HMO provider, and the HMO, pursuant to its contract, is not
				obligated to pay for providing those services.
"Claim" means a request that benefits of a plan be provided or
				paid. The benefits claimed may be in the form of:
services (including supplies);
payment for all or a portion of the expenses incurred;
a combination of services and payment; or
an indemnification.
"Claim Determination Period" or "CDP" means the period of time,
				which must not be less than 12 consecutive months, over which allowable
				expenses are compared with total benefits payable in the absence of COB, to
				determine whether over insurance exists and how much a plan will pay or
				provide.
The CDP is usually a calendar year, but a plan may use some
				other period of time that fits the coverage of the contract. A person may be
				covered by a plan during a portion of a CDP if that person's coverage starts or
				ends during the CDP.
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 CDP, but that determination is subject to adjustment as later
				allowable expenses are incurred in the same CDP.
"Code" means the Illinois Insurance Code [215 ILCS 5 ].
"Coordination of Benefits" or "COB" means a provision
				establishing an order in which plans pay their claims.
"Hospital Indemnity Benefits" means 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.
"Plan" means a form of coverage with which coordination is
				allowed. The definition of plan in the contract must state the types of
				coverage that will be considered in applying the COB provision of that
				contract. The right to include a type of coverage is limited by this
				definition.
The definition shown in the Model COB provision (see Exhibit A)
				is an example of what may be used. Any definition of plan in the contract that
				satisfies this definition may be used. (The Department will determine
				compliance with this definition under its authority in Section 143 of the
				Code.)
This Part uses the term "plan". However, a contract may,
				instead, use "program" or some other term.
Plan may include:
Individual and group insurance and group subscriber
				contracts;
Uninsured arrangements of individual, group or group-type
				coverage;
Individual and group or group-type coverage through HMOs and
				other prepayment, group practice and individual practice plans;
Group-type contracts. Group-type contracts are contracts that
				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 are used and
				regardless of how the group-type coverage is designated. Individually
				underwritten and issued guaranteed renewable policies would not be considered
				"group-type" even though purchased through payroll deduction at a premium
				savings to the insured since the insured would have the right to maintain or
				renew the policy independently of continued employment with the
				employer;
The amount by which individual, group or group-type hospital
				indemnity benefits exceed $100 per day;
The medical benefits coverage in individual or group automobile
				contracts, in group or individual automobile "no fault" contracts, and in
				traditional automobile "fault" type contracts, to the extent those contracts
				are primary plans; and
Medicare or other governmental benefits, except as provided in
				this definition. That part of the definition of plan may be limited to the
				hospital, medical and surgical benefits of the governmental program.
"Plan" shall not include:
Individual and group or group-type hospital indemnity benefits
				of $100 per day or less;
School accident-type coverages. These contracts cover
				elementary and secondary school students and college students for accidents
				only, including athletic injuries, either on a 24-hour basis or on a "to and
				from school" basis;
A state plan under Medicaid;
A law or plan when, by law, its benefits are in excess of those
				of any private insurance plan or other non-government plan;
Hospital indemnity coverage benefits or other fixed indemnity
				coverage;
Accident only coverage;
Specified disease or specified accident coverage;
Limited benefit health coverage;
School accident-type coverages that cover students for
				accidents only, including athletic injuries, either on a 24-hour basis or on a
				"to and from school" basis;
Benefits provided in long-term care insurance policies for
				nonmedical services, for example, personal care, adult day care, homemaker
				services, assistance with activities of daily living, respite care and
				custodial care, or for contracts that pay a fixed daily benefit without regard
				to expenses incurred or the receipt of services;
Medicare supplement policies;
A state plan under Medicaid;
A governmental plan that, by law, provides benefits that are in
				excess of those of any private insurance plan or other nongovernmental plan;
				or
Disability income protection coverage.
"Primary Plan" means a plan whose benefits for a person's
				health care coverage must be determined without taking the existence of any
				other plan into consideration. There may be more than one primary plan. A plan
				is a primary plan if either:
the plan has no order of benefit determination rules, or it has
				rules that differ from those permitted by this subchapter; or
all plans that cover the person use those order of benefit
				determination rules and, under those rules, the plan determines its benefits
				first.
"Secondary Plan" means a plan that is not a primary plan. If a
				person is covered by more than one secondary plan, the order of benefit
				determination of this Part decides the order in which that person's 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 that, under this Part, has its benefits determined
				before those of that secondary plan.
"This Plan", in a COB provision, refers to the part of the
				contract providing the health care benefits to which the COB provision applies
				and that 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 of its benefits (such as dental
				benefits), coordinating only with like benefits, and may apply other separate
				COB provisions to coordinate other benefits.