Section 2009.10  Purpose and Applicability

 

a)         The purpose of this regulation is to:

 

1)         Permit, but not require, plans to include a coordination of benefits (COB) provision;

 

2)         Establish an order in which plans pay their claims;

 

3)         Provide the authority for the orderly transfer of information needed to pay claims promptly;

 

4)         Reduce duplication of benefits by permitting a reduction of the benefits paid by a plan when the plan, pursuant to rules established by this Part, does not have to pay its benefits first;

 

5)         Reduce claims payment delays; and

 

6)         Make all contracts that contain a COB provision consistent with this Part.

 

b)         Applicability  

 

1)         This Part shall apply to all accident and health insurance policies or contracts, and group subscriber certificates or contracts issued thereunder, which are issued, delivered, amended or renewed in this State on or after November 8, 1988 (the effective date of this Part).

 

2)         "Plan"does not include:

 

A)        Hospital indemnity coverage benefits or other fixed idemnity coverage;

 

B)        Accident only coverage;

 

C)        Specified disease or specified accident coverage;

 

D)        Limited benefit health coverage;

 

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;

 

I)         A governmental plan that, by law, provides benefits that are in excess of those of any private insurance plan or other nongovernmental plan; or

 

J)         Disability income protection coverage.

 

c)         Any group policy subject to this Part that was issued before September 1, 2015 shall be brought into compliance with this Part by the later of:

 

1)         The next anniversary date or renewal date of the group policy; or

 

2)         The expiration of any applicable collectively bargained contract pursuant to which it was written.

 

(Source:  Amended at 39 Ill. Reg. 12548, effective September 1, 2015)

 

Section 2009.20  Definitions

 

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 overinsurance 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.

 

(Source:  Amended at 39 Ill. Reg. 12548, effective September 1, 2015)

 

Section 2009.30  Model COB Contract Provision

 

a)         Exhibit A contains a model COB provision for use in contracts. That use is subject to subsections (b) and (c) and Section 2009.40.

 

b)         A contract's COB provision does not have to use the words and format shown at Exhibit A.  Changes may be made to fit the language and style of the rest of the contract or to reflect the differences among plans that provide services, pay benefits for expenses incurred, and indemnify.  No other substantive changes are allowed.  (The Department will determine compliance with this subsection (b) under Section 143 of the Code.)

 

c)         Prohibited Coordination and Benefit Design

 

1)         A contract may not reduce benefits on the basis that:

 

A)        Another plan exists;

 

B)        A person is or could have been covered under another plan, except with respect to Part B of Medicare; or

 

C)        A person has elected an option under another plan providing a lower level of benefits than another option that could have been elected.

 

2)         No contract may contain a provision that its benefits are "excess" or "always secondary" to any plan as defined in Section 2009.20, as authorized by Section 2009.60.

 

d)         With respect to excepted benefit policies and grandfathered health plans, "specified disease coverage" pays benefits for the diagnosis and treatment of a specifically named disease or diseases.  Except for the uniform policy provision regarding other insurance with the same insurer, benefits for specified disease coverage shall be paid regardless of other coverage available through individual health insurance.

 

(Source:  Amended at 39 Ill. Reg. 12548, effective September 1, 2015)

 

Section 2009.40  Standards for Coordination of Benefits

 

a)         General

The general order of benefits is as follows:

 

1)         The primary plan must pay or provide its benefits as if the secondary plan or plans do not exist.  A plan that does not include a coordination of benefits provision may not take the benefits of another plan into account when it determines its benefits.  There is one exception:  a contract holder's coverage that is designed to supplement a part of a basic package of benefits may provide that the supplementary coverage is excess to any other parts of the plan provided by the contract holder.

 

2)         A secondary plan may take the benefits of another plan into account only when, under these standards, it is secondary to that other plan.

 

3)         The benefits of the plan that covers the person as an employee, member or subscriber (that is, other than as a dependent) are determined before those of the plan that covers the person as a dependent; except that, if the person is also a Medicare beneficiary, Medicare is:

 

A)        Secondary to the plan covering the person as a dependent; and

 

B)        Primary to the plan covering the person as other than a dependent, for example a retired employee.

 

b)         Dependent Child/Parents not Separated or Divorced

The standards for the order of benefits for a dependent child when the parents are not separated or divorced are as follows:

 

1)         The benefits of the plan of the parent whose birthday falls earlier in a year are determined before those of the plan of the parent whose birthday falls later in that year;

 

2)         If both parents have the same birthday, the benefits of the plan that covered the parent longer are determined before those of the plan that covered the other parent for a shorter period of time;

 

3)         The word "birthday" refers only to month and day in a calendar year, not the year in which the person was born;

 

4)         A contract that includes COB and that is issued or renewed, or that has an anniversary date on or after January 7, 1989, shall include the substance of subsections (b)(1), (2) and (3).

 

5)         If the other plan does not reflect the standards of subsections (b)(1), (2) and (3), but instead has a standard based upon the gender of the parent and, if, as a result, the plans do not agree on the order of benefits, the standard based upon the gender of the parent will determine the order of benefits.

 

c)         Dependent Child/Separated or Divorced Parents

 

1)         If two or more plans cover a person as a dependent child of divorced or separated parents, benefits for the child are determined in the following order:

 

A)        First, the plan of the parent with custody of the child;

 

B)        Then, the plan of the spouse of the parent with custody of the child; and

 

C)        Finally, the plan 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 child, and the entity obligated to pay or provide the benefits of the plan of that parent has been informed of those terms, the benefits of that plan are determined first.  The plan of the other parent shall be the secondary plan.  This subsection 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.

 

d)         Dependent Child/Joint Custody

If the specific terms of a court decree state that the parents shall share joint custody, without stating that one of the parents is responsible for the health care expenses of the child, the plan covering the child shall follow the order of benefit determination outlined in subsection (b).

 

e)         Young Adult/Dependent

For a dependent child who has coverage under either or both parents' plans and also has his or her own coverage as a dependent under a spouse's plan, subsection (h) applies.  In the event the dependent child's coverage under the spouse's plan began on the same date as the dependent child's coverage under either or both parents' plans, the order of benefits shall be determined by applying the birthday rule of subsection (b) to the dependent child's parent or parents and the dependent's spouse.

 

f)         Active/Inactive Employees

The benefits of a plan that 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 that covers that person as a laid-off or retired employee (or as that employee's dependent).  If the other plan does not have this standard and if, as a result, the plans do not agree on the order of benefits, this subsection (f) shall not apply.

 

g)         Continuation Coverage

 

1)         If a person whose coverage is provided under a right of continuation, pursuant to federal or State law, also is covered under another plan, the following shall be the order of benefit determination:

 

A)        First, the benefits of a plan covering the person as an employee, member or subscriber (or as that person's dependent);

 

B)        Second, the benefits under the continuation coverage.

 

2)         If the other plan does not contain the order of benefits determination described in subsection (g)(1) and, if, as a result, the plans do not agree on the order of benefits, this subsection (g) shall not apply.

 

h)         Longer/Shorter Length of Coverage

If none of the other standards of this Section determines the order of benefits, the benefits of the plan that covered an employee, member or subscriber longer are determined before those of the plan that covered that person for the shorter term.

 

1)         To determine the length of time a person has been covered under a plan, two plans shall be treated as one if the claimant was eligible under the second within 24 hours after the first ended.

 

2)         The start of a new plan does not include:

 

A)        A change in the amount of scope of a plan's benefits;

 

B)        A change in the entity that pays, provides or administers the plan's benefits; or

 

C)        A change from one type of plan to another (such as, from a single employer plan to that of a multiple employer plan).

 

3)         The claimant's length of time covered under a plan is measured from the claimant's first date of coverage under that plan.  If that date is not readily available, the date the claimant first became a member of the group shall be used as the date from which to determine the length of time the claimant's coverage under the present plan has been in force.

 

(Source:  Amended at 39 Ill. Reg. 12548, effective September 1, 2015)

 

Section 2009.50  Procedure to be followed by Secondary Plan

 

a)         When it is determined, pursuant to Section 2009.40, that this Plan is a Secondary Plan, it may reduce its benefits so that the total benefits paid or provided by all plans during a Claim Determination Period are not more than total Allowable Expenses.  The amount by which the Secondary Plan's benefits have been reduced shall be used by the Secondary Plan to pay Allowable Expenses, not otherwise paid, which were incurred during the Claim Determination Period by the person for whom the claims is made.  As each claim is submitted, the Secondary Plan determines its obligation to pay for Allowable Expenses based on all claims which were submitted up to that point in time during the Claim Determination Period.

 

b)         The benefits of the Secondary Plan will be reduced when the sum of the benefits that would be payable for the Allowable Expenses under the Secondary Plan in the absence of this COB provision and 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, exceeds those Allowable Expenses in a Claim Determination Period.  In that case, the benefits of the Secondary Plan will be reduced so that they and the benefits payable under the other plans do not total more than those Allowable Expenses.

 

1)         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.

 

2)         Subsection (b)(1) above may be omitted if the plan provides only one benefit (i.e. dental only), or may be altered to suit the coverage provided.

 

Section 2009.60  Miscellaneous Provisions

 

a)         Reasonable Cash Values of Services

A secondary plan that provides benefits in the form of services may recover the reasonable cash value of providing the services from the primary plan, to the extent that benefits for the services are covered by the primary plan and have not already been paid or provided by the primary plan. Nothing in this subsection shall be interpreted to require a plan to reimburse a covered person in cash for the value of services provided by a plan that provides benefits in the form of services.

 

b)         Excess and Other Nonconforming Provisions

 

1)         Some plans have order of benefit determination standards not consistent with this Part that declare that the plan's coverage is "excess" to all others or "always secondary".  This occurs because certain plans may not be subject to insurance regulation, or because some group contracts have not yet been conformed with this Part pursuant to Section 2009.20.

 

2)         A plan with order of benefit determination standards that comply with this Part (complying plan) may coordinate its benefits with a plan that is "excess" or "always secondary" or that uses order of benefit determination standards that are inconsistent with those contained in this Part (noncomplying plan) on the following basis:

 

A)        If the complying plan is the primary plan, it shall pay or provide its benefits on a primary basis;

 

B)        If the complying plan is the secondary plan, it shall, nevertheless, pay or provide its benefits first, but the amount of the benefits payable shall be determined as if the complying plan were the secondary plan.  In such a situation, the payment shall be the limit of the complying plan's liability;

 

C)        If the noncomplying plan does not provide the information needed by the complying plan to determine its benefits within 60 days after it is requested to do so, the complying plan shall assume that the benefits of the noncomplying plan are identical to its own and shall pay its benefits accordingly.  However, the complying plan must adjust any payments it makes based on that assumption whenever information becomes available as to the actual benefits of the noncomplying plan; and

 

D)        If the noncomplying plan reduces its benefits so that the employee, subscriber or member receives less in benefits than he or she would have received had the complying plan paid or provided its benefits as the secondary plan and the noncomplying plan paid or provided its benefits as the primary plan, and governing state law allows the right of subrogation set forth in subsection (d), the complying plan shall advance to or on behalf of the employee, subscriber or member an amount equal to the difference. However, in no event shall the complying plan advance more than the complying plan would have paid had it been the primary plan less any amount it previously paid.  In consideration of the advance, the complying plan shall be subrogated to all rights of the employee, subscriber or member against the noncomplying plan.  The advance by the complying plan shall also be without prejudice to any claim it may have against the noncomplying plan in the absence of subrogation.

 

c)         Allowable Expense.  Terms such as "usual and customary", "usual and prevailing", "maximum allowable fee", "eligible expense", or "reasonable and customary" may be substituted for the term "necessary, reasonable and customary".  Terms such as "medical care" or "dental care" may be substituted for "health care" to describe the coverages to which the COB provisions apply.

 

d)         Subrogation.  The COB concept clearly differs from that of traditional subrogation.  Provisions for one may be included in health care benefits contracts without compelling the inclusion or exclusion of the other.

 

(Source:  Amended at 39 Ill. Reg. 12548, effective September 1, 2015)

Section 2009.EXHIBIT A   Model COB Provisions

 

COORDINATION OF THE CONTRACT'S BENEFITS

WITH OTHER BENEFITS

 

I.          APPLICABILITY

 

A.        This Coordination of Benefits ("COB") provision applies to This Plan when an enrollee or the enrollee's covered dependent has health care coverage under more than one Plan.  "Plan" and "This Plan" are defined in Section II.

 

B.        If this COB provision applies, the order of benefit determination rules should be looked at first.  Those rules determine whether the benefits of This Plan are determined before or after those of another plan. The benefits of This Plan:

 

(1)        Shall not be reduced when, under the order of benefit determination rules, This Plan determines its benefits before another plan; but

 

(2)        May be reduced when, under the order of benefits determination rules, another plan determines its benefits first.  The reduction is described in Section IV "Effect on the Benefits of This Plan."

 

II.        DEFINITIONS

 

A.        "Plan" is any of the following that provides benefits or services for, or because of, medical or dental care or treatment:

 

(1)        Individual or group insurance or group-type coverage, whether insured or uninsured. This includes prepayment, group practice or individual practice coverage. It also includes coverage other than school accident-type coverage.

 

(2)        Coverage under a governmental plan, or coverage 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 (42 USC 301 et seq.), as amended from time to time).

 

Each contract or other arrangement for coverage under (1) or (2) is a separate plan.  Also, if an arrangement has two parts and COB rules apply only to one of the two, each of the parts is a separate plan.

 

B.        "Plan" does not include:

 

(1)        Hospital indemnity coverage benefits or other fixed indemnity coverage;

 

(2)        Accident only coverage;

 

(3)        Specified disease or specified accident coverage;

 

(4)        Limited benefit health coverage;

 

(5)        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;

 

(6)        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;

 

(7)        Medicare supplement policies;

 

(8)        A state plan under Medicaid;

 

(9)        A governmental plan that, by law, provides benefits that are in excess of those of any private insurance plan or other nongovernmental plan; or

 

(10)       Disability income protection coverage.

 

C.        "This Plan" is the part of the contract that provides benefits for health care expenses.

 

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 Primary Plan, its benefits are determined before those of the other plan and without considering the other plan's benefits.

 

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 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.         "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 under this definition 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 will be considered both an Allowable Expense and a benefit paid.

 

F.         "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.

 

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 that has its benefits determined after those of the other plan, unless:

 

(1)        The other plan has rules coordinating its benefits with those of This Plan; and

 

(2)        Both those rules and This Plan's rules (see Section III(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 that applies:

 

(1)        Non-Dependent/Dependent.  The benefits of the plan that covers the person as an employee, member or subscriber (that is, other than as a dependent) are determined before those of the plan that covers the person as a dependent, except that, if the person is also a Medicare beneficiary, Medicare is:

 

(a)        Secondary to the plan covering the person as a dependent; and

 

(b)        Primary to the plan covering the person as other than a dependent, for example a retired employee.

 

(2)        Dependent Child/Parents not Separated or Divorced.  Except as stated in Section III(B)(3), when This Plan and another plan cover the same child as a dependent of a different person (i.e., "parent"):

 

(a)        The benefits of the plan of the parent whose birthday falls earlier in a year are determined before those of the plan of the parent whose birthday falls later in that year; but

 

(b)        If both parents have the same birthday, the benefits of the plan that covered the parent longer are determined before those of the plan that covered the other parent for a shorter period of time.

 

However, if the other plan does not have the rule described in Section III(B)(2)(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 will determine the order of benefits.

 

(3)        Dependent Child/Separated or Divorced.  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 custody of the child; and

 

(c)        Finally, the plan of the parent not having custody of the child.

 

However, if the specific terms of a court decree state that one of the parents is responsible for the health care expense 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.  The plan of the other parent shall be the secondary plan.  This 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.

 

(4)        Dependent Child/Joint Custody.  If the specific terms of a court decree state that the parents shall share joint custody, without stating that one of the parents is responsible for the health care expenses of the child, the plans covering the child shall follow the order of benefit determination rules outlined in Section III(B)(2).

 

(5)        Active/Inactive Employee.  The benefits of a plan that 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 that 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 Section III(B)(5) shall not apply.

 

(6)        Continuation Coverage.  If a person whose coverage is provided under a right of continuation pursuant to federal or State law also is covered under another plan, the following shall be the order of benefit determination:

 

(a)        First, the benefits of a plan covering the person as an employee, member or subscriber (or as that person's dependent);

 

(b)        Second, the benefits under the continuation coverage.

 

If the other plan does not contain the order of benefits determination described in this Section III and if, as a result, the plans do not agree on the order of benefits, this requirement shall be ignored.

 

(7)        Longer/Shorter Length of Coverage.  If none of the rules in this Section III determines the order of benefits, the benefits of the plan that covered an employee, member or subscriber longer are determined before those of the Plan that covered that person for the shorter term.

 

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 IV.  The other plan or plans are referred to as "the other plans" in Section IV(B).

 

B.        Reduction in This Plan's Benefits.

 

(1)        The benefits of This Plan will be reduced when:

 

(a)        The benefits that would be payable for the Allowable Expense under This Plan in the absence of this COB provision; and

 

(b)        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;

 

exceeds those Allowable Expenses in a Claim Determination Period.  In that case, 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.

 

(2)        When the benefits of This Plan are reduced as described in Section IV(B)(1), each benefit is reduced in proportion.  It is then charged against any applicable benefit limit of This Plan.

 

V.        RIGHT TO RECEIVE AND RELEASE NEEDED INFORMATION

 

Certain facts are needed to apply these COB rules.  [Insurer] has the right to decide which facts it needs.  It may get needed facts from or give them to any other organization or person.  [Insurer] need not tell, or get the consent of, any person to do this.  Each person claiming benefits under This Plan must give [insurer] any facts it needs to pay the claim.

 

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, [insurer] may pay that amount to the organization that made the payment under the other plan.  That amount will then be treated as though it were a benefit paid under This Plan.  [Insurer] 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 [insurer] 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.

 

(Source:  Amended at 39 Ill. Reg. 12548, effective September 1, 2015)