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

Current through Register Vol. XLI, No. 28, July 12, 2024
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.