Wisconsin Administrative Code › Office of the Commissioner of Insurance › Chapter Ins 3 - Casualty Insurance › Appendix A

Current through June 24, 2024
Model COB Provision
This appendix provides model COB provision language. The terms
				and conditions of all insurance contracts containing a COB provision must
				comply with
				Ins
				3.40
COORDINATION OF THE GROUP CONTRACT'S BENEFITS WITH OTHER
				BENEFITS
(I) Applicability.
(A) This Coordination of Benefits ("COB") provision applies to
				This Plan when an employee or the employee's covered dependent has health care
				coverage under more than one Plan. "Plan" and "This Plan" are defined
				below.
(B) If this COB provision applies, the order of benefit
				determination rules shall be looked at first. The rules determine whether the
				benefits of This Plan are determined before or after those of another Plan. The
				benefits of This Plan:
(i) shall not be reduced when, under the order of benefit
				determination rules, This Plan determines its benefits before another Plan;
				but
(ii) may be reduced when, under the order of benefit
				determination rules, another Plan determines its benefits first. This reduction
				is described in Section (IV) Effect on the Benefits of This Plan.
II Definitions.
(A) "
Allowable Expense
" means a necessary,
				reasonable, and customary item of expense for health care, when the item of
				expense is covered at least in part by one or more Plans covering the person
				for whom the claim is made. 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 unless the patient's stay in a private hospital room is
				medically necessary either in terms of generally accepted medical practice or
				as specifically defined in the Plan. When a Plan provides benefits in the form
				of services, the reasonable cash value of each service rendered shall be
				considered both an Allowable Expense and a benefit paid.
(B) "
Claim Determination Period
" means a
				calendar year. However, it does not include any part of a year during which a
				person has no coverage under This Plan or any part of a year before the date
				this COB provision or a similar provision takes effect.
(C) "
Plan
" means any of the following which
				provides benefits or services for, or because of, medical or dental care or
				treatment:
(i) Group insurance or group-type coverage, whether insured or
				uninsured, that includes continuous 24-hour coverage. This includes prepayment,
				group practice or individual practice coverage. It also includes coverage other
				than school accident-type coverage.
(ii) Coverage under a governmental plan or coverage that is
				required or provided by law. This does not include a state plan under Medicaid
				(Title XIX, Grants to States for Medical Assistance Programs, of the United
				States Social Security Act as amended from time to time). It also does not
				include any plan whose benefits, by law, are excess to those of any private
				insurance program or other non-governmental program. Each contract or other
				arrangement for coverage under (i) or (ii) is a separate Plan. If an
				arrangement has two parts and COB rules apply only to one of the two, each of
				the parts is a separate Plan.
(D) "
Primary Plan"/"Secondary Plan.
" The order
				of benefit determination rules state whether This Plan is a Primary Plan or
				Secondary Plan as to another Plan covering the person.
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.
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.
When there are more than two Plans covering the person, This
				Plan may be a Primary Plan as to one or more other Plans and may be a Secondary
				Plan as to a different Plan or Plans.
(E) "
This Plan
" means the part of the group
				contract that provides benefits for health care expenses.
(III) Order of benefit determination rules.
(A)
General.
When there is a basis for a claim
				under This Plan and another Plan, This Plan is a Secondary Plan which has its
				benefits determined after those of the other Plan, unless:
(i) the other Plan has rules coordinating its benefits with
				those of This Plan; and
(ii) both those rules and This Plan's rules described in
				subparagraph (B) require that This Plan's benefits be determined before those
				of the other Plan.
(B)
Rules.
This plan determines its order of
				benefits using the first of the following rules which applies:
(i)
Non-dependent/Dependent.
The benefits of
				the Plan which covers the person as an employee, member or subscriber are
				determined before those of the Plan which covers the person as a dependent of
				an employee, member or subscriber.
(ii)
Dependent Child/Parents Not Separated or
				Divorced.
Except as stated in subparagraph (B) (iii), when This Plan
				and another Plan cover the same child as a dependent of different persons,
				called "parents:"
a. the benefits of the Plan of the parent whose birthday falls
				earlier in the calendar year are determined before those of the Plan of the
				parent whose birthday falls later in that calendar year; but
b. if both parents have the same birthday, the benefits of the
				Plan which covered the parent longer are determined before those of the Plan
				which covered the other parent for a shorter period of time.
However, if the other Plan does not have the rule described in
				a. but instead has a rule based upon the gender of the parent, and if, as a
				result, the Plans do not agree on the order of benefits, the rule in the other
				Plan shall determine the order of benefits.
(iii)
Dependent Child/Separated or Divorced
				Parents.
If two or more Plans cover a person as a dependent child of
				divorced or separated parents, benefits for the child are determined in this
				order:
a. first, the Plan of the parent with custody of the
				child;
b. then, the Plan of the spouse of the parent with the custody
				of the child; and
c. finally, the Plan of the parent not having custody of the
				child.
Also, if the specific terms of a court decree state that the
				parents have joint custody of the child and do not specify that one parent has
				responsibility for the child's health care expenses or if the court decree
				states that both parents shall be responsible for the health care needs of the
				child but gives physical custody of the child to one parent, and the entities
				obligated to pay or provide the benefits of the respective parents' Plans have
				actual knowledge of those terms, benefits for the dependent child shall be
				determined according to (III) (B) (ii).
However, if the specific terms of a court decree state that one
				of the parents is responsible for the health care expenses of the child, and
				the entity obligated to pay or provide the benefits of the Plan of that parent
				has actual knowledge of those terms, the benefits of that Plan are determined
				first. This paragraph does not apply with respect to any Claim Determination
				Period or plan year during which any benefits are actually paid or provided
				before the entity has that actual knowledge.
(iv)
Active/Inactive Employee.
The benefits of
				a Plan which covers a person as an employee who is neither laid off nor retired
				or as that employee's dependent are determined before those of a Plan which
				covers that person as a laid off or retired employee or as that employee's
				dependent. If the other Plan does not have this rule and if, as a result, the
				Plans do not agree on the order of benefits, this rule (iv) is ignored.
Note:
If a dependent is a Medicare beneficiary
				and if, under the Social Security Act of 1965 as amended, Medicare is secondary
				to the plan covering the person as a dependent of an active employee, the
				federal Medicare regulations shall supersede this paragraph (iv).
(v)
Continuation coverage.
a. If a person has continuation coverage under federal or state
				law and is also covered under another plan, the following shall determine the
				order of benefits:
i. First, the benefits of a plan covering the person as an
				employee, member or subscriber or as a dependent of an employee, member or
				subscriber.
ii. Second, the benefits under the continuation
				coverage.
b. If the other plan does not have the rule described in
				subparagraph a., and if, as a result, the plans do not agree on the order of
				benefits, this paragraph (v) is ignored.
(vi)
Longer/Shorter Length of Coverage.
If none
				of the above rules determines the order of benefits, the benefits of the Plan
				which covered an employee, member or subscriber longer are determined before
				those of the Plan which covered that person for the shorter time.
(IV) Effect on the benefits of this plan.
(A)
When This Section Applies.
This Section
				(IV) applies when, in accordance with Section (III) Order of Benefit
				Determination Rules, This Plan is a Secondary Plan as to one or more other
				Plans. In that event the benefits of This Plan may be reduced under this
				section. Such other Plan or Plans are referred to as "the other Plans" in
				(B).
(B)
Reduction in This Plan's Benefits.
The
				benefits of This Plan will be reduced when the sum of the following exceeds the
				Allowable Expenses in a Claim Determination Period:
(i) the benefits that would be payable for the Allowable
				Expenses under This Plan in the absence of this COB provision; and
(ii) the benefits that would be payable for the Allowable
				Expenses under the other Plans, in the absence of provisions with a purpose
				like that of this COB provision, whether or not claim is made. Under this
				provision, the benefits of This Plan will be reduced so that they and the
				benefits payable under the other Plans do not total more than those Allowable
				Expenses.
When the benefits of This Plan are reduced as described above,
				each benefit is reduced in proportion. It is then charged against any
				applicable benefit limit of This Plan.
Note:
The last paragraph may be omitted if the
				Plan provides only one benefit or may be altered to suit the coverage
				provided.
(V) Right to receive and release needed information. The [name
				of insurance company] has the right to decide the facts it needs to apply these
				COB rules. It may get needed facts from or give them to any other organization
				or person without the consent of the insured but only as needed to apply these
				COB rules. Medical records remain confidential as provided by state law. Each
				person claiming benefits under This Plan must give the [name of insurance
				company] any facts it needs to pay the claim.
(VI) Facility of payment. A payment made under another Plan may
				include an amount which should have been paid under This Plan. If it does, The
				[name of insurance company] may pay that amount to the organization which made
				that payment. That amount will then be treated as though it were a benefit paid
				under This Plan. The [name of insurance company] will not have to pay that
				amount again. The term "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
				the [name of insurance company] is more than it should have paid under this COB
				provision, it may recover the excess from one or more of:
(A) the persons it has paid or for whom it has paid;
(B) insurance companies; or
(C) other organizations.
The "amount of the payments made" includes the reasonable cash
				value of any benefits provided in the form of services.