Ariz. Admin. Code § R20-6-214 - Coordination of Benefits
A.
Applicability.
1. This Section applies to
all:
a. Group disability insurance
policies;
b. Group subscriber
contracts of hospital and medical service corporations and health care services
organizations;
c. Group disability
policies of benefit insurers; and
d. Group-type contracts that contain a
coordination of benefits provision, are not available to the general public,
and can be obtained and maintained only because of the covered person's
membership in or connection with a particular organization. Group-type
contracts that meet this description are included regardless of whether
denominated as "franchise," "blanket," or some other designation.
2. This Section does not apply to:
a. Individual or family policies or
individual or family subscriber contracts except as provided for in subsection
(A)(1);
b. Group or group-type
hospital indemnity benefits, written on a non-expense incurred basis, of $30
per day or less unless characterized as reimbursement-type benefits and
designed or administered to give the insured the right to elect indemnity-type
benefits, instead of the reimbursement type benefits at the time of claim;
or
c. School accident type
coverages, written on a blanket, group, or franchise basis.
B. Definitions. In this
Section, the following definitions apply:
1.
"Allowable expense" means any necessary, reasonable, and customary item of
expense, at least a portion of which is covered under one or more of the plans
covering the person for whom claim is made or service provided.
a. When a plan provides benefits in the form
of services rather than cash payments, the reasonable cash value of each
service rendered is deemed to be both an allowable expense and a benefit
paid.
b. A plan that takes Medicare
or similar government benefits into consideration when determining the
application of its coordination of benefits provision does not expand the
definition of an allowable expense.
2. "Claim determination period" means an
appropriate period of time such as "calendar year" or "benefit period" as
defined in the policy.
3. "Plan,"
within the coordination of benefits provisions of a group policy or subscriber
contract, means the types of coverage that the insurer may consider in
determining whether overinsurance exists with respect to a specific
claim.
4. "School accident-type
coverage" means coverage of grammar school and high school students for
accidents only, including athletic injuries, either on a 24-hour basis or
"to-and-from school," for which the parent pays the entire premium.
C. Order-of-benefit determination.
1. When a claim under a plan with a
coordination of benefit provision involves another plan that also has a
coordination of benefit provision, the insurer shall make the order-of-benefit
determination as follows:
a. The plan that
covers the person claiming benefits other than as a dependent shall determine
benefits before those of the plan that covers the person as a
dependent.
b. The plan of a parent
whose birthday occurs earlier in a calendar year shall cover a dependent child
before the benefits of a plan of a parent whose birthday occurs later in a
calendar year. The word "birthday" as used in this subsection refers only to
month and day in a calendar year, not the year in which the person was
born.
c. 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:
i. First, the plan of the parent with custody
of the child;
ii. Then, the plan of
the spouse of the parent with custody of the child; and
iii. Finally, the plan of the parent not
having custody of the child.
d. Notwithstanding subsection (c), 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.
2. The benefits of a plan that covers a
person as an employee (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 provision
and if, as a result, the plans do not agree on the order of benefits, this
subsection does apply.
3. If none
of the provisions of subsection (C) determines the order of benefits, the
benefits of the plan that covered a claimant longer are determined before those
of the plan that covered that person for the shorter time.
4. If one of the plans is issued out of this
state and determines the order of benefits based upon the gender of a parent
and, as a result, the plans do not agree on the order of benefits, the plan
with the gender rule shall determine the order of benefits.
D. Excess and other nonconforming
provisions. A plan with an order of benefit determination provision that
complies with this Section, a complying plan, may coordinate its benefits with
a plan that is "excess" or "always secondary" or that uses an order-of-benefit
determination provision that is inconsistent with this Section, a noncomplying
plan, on the following basis:
1. If the
complying plan is the primary plan, it shall pay or provide its benefits on a
primary basis.
2. If the complying
plan is the secondary plan, it shall pay or provide its benefits first, as the
secondary plan. The payment shall be the limit of the complying plan's
liability, except as provided in subsection (4).
3. If the noncomplying plan does not provide
the information needed by the complying plan to determine its benefits within a
reasonable time 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 benefits accordingly. The complying plan shall adjust any payments it makes
based on the assumption whether information becomes available as the actual
benefits of the noncomplying plan.
4. If the noncomplying plan pays benefits so
that the claimant receives less in benefits than the claimant would have
received had the noncomplying plan paid or provided its benefits as the primary
plan, the complying plan shall advance to or on behalf of the claimant an
amount equal to the difference. The complying plan shall not have a right to
reimbursement from the claimant.
Notes
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