Iowa Administrative Code › Agency 191 - Insurance Division › Life and Health Insurance › Chapter 38 - Coordination of Benefits › Rule 191-38.13 - Definitions

Current through Register Vol. 47, No. 3, July 24, 2024
As used in this division, these terms have the following
				  meanings, unless the context clearly indicates otherwise:
"Allowable expense, "
except as set forth
				  below or where a statute requires a different definition, means any health care
				  expense, including coinsurance or copayments and without reduction for any
				  applicable deductible, that is covered in full or in part by any of the plans
				  covering the person.
1. If a plan is advised by a covered person that all plans
				  covering the person are high-deductible health plans and the person intends to
				  contribute to a health savings account established in accordance with Section
				  223 of the Internal Revenue Code of 1986, the primary high-deductible health
				  plan's deductible is not an allowable expense, except for any health care
				  expense incurred that may not be subject to the deductible as described in
				  Section 223(c)(2)(C) of the Internal Revenue Code of 1986.
2. An expense or a portion of an expense that is not covered
				  by any of the plans is not an allowable expense.
3. 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.
4. The following are examples of expenses that are not
				  allowable expenses:
a. If a person is confined in a private hospital room, the
				  difference between the cost of a semiprivate room in the hospital and the
				  private 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 or more plans that compute
				  their benefit payments on the basis of usual and customary fees or relative
				  value schedule reimbursement or other similar reimbursement methodology, any
				  amount charged by the provider in excess of the highest reimbursement amount
				  for a specified benefit is not an allowable expense.
c. If a person is covered by two or more plans that provide
				  benefits or services on the basis of negotiated fees, any 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 or other similar reimbursement methodology and by
				  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 from the primary plan's payment arrangement and if the
				  provider's contract permits, that negotiated fee or payment shall be the
				  allowable expense used by the secondary plan to determine its benefits.
5. The definition of "allowable expense" may exclude certain
				  types of coverage or benefits such as dental care, vision care, prescription
				  drugs or hearing aids. A plan that limits the application of COB to certain
				  coverages or benefits may limit the definition of "allowable expense" in its
				  contract to expenses that are similar to the expenses that it provides. When
				  COB is restricted to specific coverages or benefits in a contract, the
				  definition of "allowable expense" shall include similar expenses to which COB
				  applies.
6. 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.
7. The amount of the reduction may be excluded from allowable
				  expense when a covered person's benefits are reduced under a primary
				  plan:
a. Because the covered person does not comply with the plan
				  provisions concerning second surgical opinions or precertification of
				  admissions or services; or
b. Because the covered person has a lower benefit because the
				  covered person did not use a preferred provider
"Birthday "
refers only to month and day in
				  a calendar year and does not include the year in which the individual is
				  born.
"
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 or expenses incurred; or an indemnification.
"
Closed panel plan
" means a plan that
				  provides health 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 benefits for services provided by other providers,
				  except in cases of emergency or referral by a panel member.
"
Consolidated Omnibus Budget Reconciliation Act of
				  1985
" or "
COBRA
" means coverage provided under a
				  right of continuation pursuant to federal law.
"
Coordination of benefits
" or
				  "
COB
" means a provision establishing an order in which plans
				  pay their claims and permitting secondary plans to reduce their benefits so
				  that the combined benefits of all plans do not exceed total allowable
				  expenses.
"
Custodial parent
" means the parent awarded
				  custody of a child by a court decree or, in the absence of a court decree, the
				  parent with whom the child resides more than one-half of the calendar year
				  without regard to any temporary visitation.
"
Group-type contract
" means a contract that
				  is not available to the general public and is obtained and maintained only
				  because of membership in or a connection with a particular organization or
				  group, including blanket coverage.
"
Group-type contract
" does not include an
				  individually underwritten and issued guaranteed renewable policy even if the
				  policy is 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.
"
High-deductible health plan
" has the
				  meaning given the term under Section 223 of the Internal Revenue Code of 1986,
				  as amended by the Medicare Prescription Drug, Improvement and Modernization Act
				  of 2003.
"
Hospital indemnity benefits
" means
				  benefits not related to expenses incurred. "
Hospital indemnity
				  benefits
" 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. Separate parts of a plan for members of a group that
				  are provided through alternative contracts that are intended to be part of a
				  coordinated package of benefits are considered one plan and there is no COB
				  among the separate parts of the plan.
If a plan coordinates benefits, its contract shall state the
				  types of coverage that will be considered in applying the COB provision of that
				  contract. Whether the contract uses the term "plan" or some other term such as
				  "program," the contractual definition may be no broader than the definition of
				  "plan" in paragraph 1 below. A model COB provision is contained in Appendix A
				  of this division.
1. "Plan" includes:
a. Group and nongroup insurance contracts and subscriber
				  contracts;
b. Uninsured arrangements of group or group-type coverage;
c. Group and nongroup coverage through closed panel plans;
d. Group-type contracts;
e. The medical care components of long-term care contracts,
				  such as skilled nursing care;
f. The medical benefits coverage in automobile "no fault" and
				  traditional automobile "fault" contracts; and
g. Medicare or other governmental benefits, as permitted by
				  law, except as provided in paragraph 2"
h
" below. This part of
				  a plan may be limited to the hospital, medical and surgical benefits of the
				  governmental program.
2. "Plan" does not include:
a. Hospital indemnity coverage benefits or other fixed
				  indemnity coverage;
b. Accident-only coverage;
c. Specified disease or specified accident coverage;
d. Limited benefit health insurance coverage, as defined in
				  191-subrule 36.6(10);
e. 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;
f. 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;
g. Medicare supplement policies;
h. A state plan under Medicaid; or
i. A governmental plan, which, by law, provides benefits that
				  are in excess of those of any private insurance plan or other nongovernmental
				  plan.
"Policyholder" means the primary insured named in a nongroup
				  insurance policy.
"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. A plan is a "primary plan" if:
1. The plan either has no order of benefit determination
				  rules, or its rules differ from those permitted by this division; or
2. All plans that cover the person use the order of benefit
				  determination rules required by this division, and under those rules the plan
				  determines its benefits first.
"Secondary plan" means a plan that is not a primary
				  plan.