Nebraska Administrative Code › Topic - INSURANCE, DEPARTMENT OF › Title 210 - NEBRASKA DEPARTMENT OF INSURANCE › Chapter 39 - COORDINATION OF BENEFITS REGULATION › Appendix A - MODEL COB CONTRACT PROVISIONS

Current through June 17, 2024
COORDINATION OF THIS CONTRACT'S 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
does
				  not exceed 100% of the total
Allowable expense
.
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 motor vehicle 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 other than
				  the medical benefits coverage in automobile "no fault" and traditional "fault"
				  type contracts; specified disease or specified accident coverage; limited
				  benefit health coverage, as defined by state law; 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.
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
Plan's
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 expense,
				  including deductibles, coinsurance and copayments, that is covered 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 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
.
The following are examples of expenses that are not
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 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.
(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
.
B. (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.
C. 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
.
D. 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 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. 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 child's 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 child's health care expenses or health care coverage, the
				  order of benefits for the child are as follows:
* The
Plan
covering the
Custodial
				  parent
;
* The
Plan
covering the spouse of the
Custodial parent
;
* The
Plan
covering the
non-custodial
				  parent
; and then
* 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 who has coverage under either or
				  both parents' plans and also has coverage as a dependent under a spouse's plan,
				  the rule in Paragraph (5) applies.
(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
Primar
y
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 any amounts it would have credited
				  to its deductible in the absence of other health care coverage. Also, where the
				  primary plan is medical payments coverage under a motor vehicle policy, the
				  secondary plan shall credit payments from the motor vehicle insurance policy to
				  deductibles, copayments and coinsurance after discounts under the health
				  plan.
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
.
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
				  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 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
				  responsibility 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.