11 NCAC 12 .0514             COORDINATION: GROUP A/H CONTRACT BENEFITS: GROUP COVERAGES

Purpose.  In order to promote consistency in liability for claims and claims determination for Group Accident and Health coverage, the department shall require a uniform order of benefits determination as follows:

(1)           Applicability:

(a)           This Coordination of Benefits ("COB") provision applies to this plan when a employee or the employee's covered dependent has health care coverage under more than one plan.  "Plan" and "This Plan" are defined in (2)(a) and (b) of this Rule.

(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:

(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 Section (IV) Effect on the Benefits of this plan.

(2)           Definitions:

(a)           A "Plan" is any of these which provides benefits or services for, or because of, medical or dental care or treatment:

(i)            True group insurance.  This includes prepayment, group practice or individual practice coverage.  It does not include school accident‑type coverage, blanket, franchise individual, automobile and homeowner coverage.

(ii)           Coverage under a governmental plan or 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 when, by law, its benefits are excess to those of any private insurance program or other non‑governmental program.

Each contract or other arrangement for coverage under (2)(a) (i) or (ii) 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)           "This Plan" is the part of the group contact that provides benefits for health care expenses.

(c)           "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 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.

(d)           "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.  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.  Total benefits paid must be equal to 100 percent of necessary medical expenses covered by both plans.

(e)           "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.

(3)           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, in (3)(b)(ii)(B) of this Rule, 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 (that is, other than as a dependent) are determined before those of the plan which covers the person as a dependent.

(ii)           Dependent Child/Parents Not Separated or Divorced.  Except as stated in (3)(b)(iii)(B) of this Rule, 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 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 has covered a parent for a longer period of time 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 Paragraph (3)(a) in this Rule, 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.

(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 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 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.  In this Rule, (3)(b)(iii)(C) 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 (3)(b)(iv), and if, as a result, the plans do not agree on the order of benefits, (3)(b)(iv) is ignored.

(v)           Longer/Shorter Length of Coverage.  If more of Paragraph (3) of this Rule 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.

 

History Note:        Authority G.S. 58‑2‑40; 58‑51‑1; 58‑65‑1; 58‑65‑40;

Eff. February 1, 1976;

Readopted Eff. September 26, 1978;

Amended Eff. February 1, 1992; April 1, 1989; July 1, 1986.