NECESSITY, FUNCTION, AND CONFORMITY:
304.2-110 authorizes the commissioner of the
Department of Insurance to promulgate reasonable administrative regulations
necessary for or as an aid to the effectuation of any provision of the Kentucky
304.32-250 authorizes the commissioner to
promulgate reasonable administrative regulations necessary for the proper
administration of KRS 304.32.
304.38-150 authorizes the commissioner to
promulgate reasonable administrative regulations necessary for the proper
administration of KRS 304.38. This administrative regulation establishes
guidelines for coordination of benefits by group health insurance
(1) "Allowable expense" means a health care
service or expense, including deductibles, coinsurance, and copayments, that is
covered in full or in part by any of the plans covering the person.
"Claim" means a request that benefits of
a plan be provided or paid, and the benefits claimed are in the form of:
(a) Services including supplies;
(b) Payment for all or a portion of the
combination of paragraphs (a) and (b) of this subsection; or
(d) An indemnification.
(3) "Complying plan" means a plan with
benefit determination requirements that comply with the requirements of this
"Coordination of benefits" means a provision establishing an order in which
plans pay their claims, and permitting secondary plans to reduce their benefits
so that the combined benefits of all plans do not exceed total allowable
(5) "Custodial parent"
means the parent awarded custody of a child by a court decree or with whom the
child resides more than one-half (1/2) of the calendar year.
(6) "Insurer" is defined by
(7) "Noncomplying plan" means a plan without
benefit determination requirements or whose benefit determination requirements
do not comply with the requirements of this administrative
1. A form of coverage with which coordination
of benefits is allowed and "health benefit plans" as defined by
Sometimes includes Medicare
benefits pursuant to
, or other governmental benefits;
Does not mean:
1. The medical benefits coverage in a group,
group-type, and individual motor vehicle "no-fault" and traditional automobile
"fault" type contracts; or
School accident-type coverages that cover elementary, high school, or college
students for accidents only, including athletic injuries, either on a
twenty-four (24) hour basis or on a "to-and-from school" basis.
means a plan whose benefits for a person's health care coverage are determined
without taking the existence of any other plan into consideration if:
(a) The plan either has no order of benefit
determination requirements, or its requirements differ from those permitted by
this administrative regulation; or
(b) All plans that cover the person use the
order of benefit determination requirements required by this administrative
regulation, and under those requirements the plan determines its benefits
plan" means a plan that is not a primary plan.
Requirements for Coordination of
If a person is covered by two
(2) or more plans, the requirements for determining the order of benefit
payments shall be as established in paragraphs (a) through (c) of this
(a) The primary plan shall pay or
provide its benefits as if the secondary plan or plans did not exist.
(b) A plan that does not contain a
coordination of benefits provision consistent with this administrative
regulation shall be always be primary, except that coverage obtained by virtue
of membership in a group and designed to supplement a part of a basic package
of benefits may state the supplementary coverage shall be secondary to the
basic package of benefits provided by the contract holder.
(c) A plan may take the benefits of another
plan into account only if it is secondary to that other plan.
Order of Benefit
Determination. The following requirements shall be applied in the following
priority, alphabetically to determine the order of plan payment:
Nondependent or dependent.
1. The plan that covers a person other than
as a dependent shall be primary.
The plan that covers a person as a dependent shall be secondary, unless the
person is a Medicare beneficiary, in which case the order of benefits is
determined in accordance with
Dependent child covered under more than
one (1) plan. Unless a court decree determines otherwise, plans covering a
dependent child, including a newborn subject to
shall determine the order of benefits as established in subparagraphs 1.
through 4. of this paragraph.
plan shall be the plan of the parent whose birthday is earlier in the year if:
a. The parents are married;
b. The parents are not separated (whether or
not they ever have been married); or
c. A court decree awards joint custody
without establishing that one (1) parent has the responsibility to provide
health care coverage.
If both parents have the same birthday, the plan that has covered either of the
parents longer shall be primary.
If a court decree states that one (1) parent is responsible for the child's
health care expenses or health care coverage and the plan of that parent has
actual knowledge of those terms, that plan shall be primary. If the parent with
responsibility has no coverage for the child's health care ser-vices or
expenses, but the responsible parent's spouse does, the spouse's plan shall be
If the parents are
divorced, separated, or not married, and there is no court decree allocating
responsibility for the child's health care services or expenses, the order of
benefit determination among the plans of the parents and the parents' spouses
(if any) shall be the plan of the:
b. Spouse of the
d. Spouse of the
(c) Active or inactive employee. The plan
that covers a person as an active employee, neither laid off nor retired, or as
an active employee's dependent, shall be primary. The plan covering the same
person as a retired or laid-off employee or as a dependent of a retired or
laid-off employee shall be the secondary plan.
(d) Continuation coverage. If a person has
coverage provided pursuant to a right of continuation pursuant to federal or
state law and is also covered under another plan, the continuation coverage
shall be secondary.
shorter length of coverage. If the preceding requirements established in
paragraphs (a) through (d) of this subsection, respectively, do not determine
the order of benefits, the plan that covered the person for the longer period
of time shall be primary:
1. To determine the
length of time a person has been covered under a plan, two (2) plans shall be
treated as one (1) if the covered person was eligible under the second within
twenty-four (24) hours after the first ended;
Changes during a coverage period that do
not constitute the start of a new plan include:
a. A change in scope of a plan's
b. A change in the entity
that pays, provides, or administers the plan's benefits; or
c. A change from one (1) type of plan to
person's length of time covered under a plan shall be measured from the
person's first date of coverage under that plan. If that date is not readily
available for a group plan, the date the person first became a member of the
group shall be used as the date from which to determine the length of time the
person's coverage under the present plan has been in force.
(f) If none of the preceding
requirements established in paragraphs (a) through (e) of this subsection,
respectively, determines the primary plan, the allowable expenses shall be
shared equally between the plans.
Procedure to be followed by
Secondary Plan to Calculate Benefits and Pay Claim.
(1) A secondary plan shall reduce its
benefits so that the total benefits paid or provided by all plans shall not be
more than 100 percent of total allowable expenses.
(2) If a person is covered by more than one
(1) secondary plan, the order of benefit determination requirements of this
administrative regulation decide the order in which secondary plans benefits
shall be determined in relation to each other.
(3) The secondary plan shall credit to its
plan deductible any amounts it would have credited to its deductible in absence
of other health care coverage.
Section 4. Notice to Covered Persons. A plan
shall, in its explanation of benefits provided to covered persons, include the
following language: "If you are covered by more than one (1) health benefit
plan, you should file all your claims with each plan."
(1) Provision of Services. A secondary plan
that provides benefits in the form of services shall only recover the
reasonable cash value of 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.
Non-Complying Plan Coordination.
A plan with order of benefit
determination requirements that comply with this administrative regulation may
coordinate its benefits with a plan that is "excess" or "always secondary" or
that uses order of benefit determination requirements that do not comply with
those contained in this administrative regulation if the:
1. Complying plan is the primary plan, it
shall pay or provide its benefits first;
2. Complying plan is the secondary plan, it
shall 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 that
situation, the payment shall be the limit of the complying plan's liability;
3. 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 its benefits accordingly. If, within two (2) years of
payment, the complying plan receives information as to the actual benefits of
the noncomplying plan, it shall adjust payments accordingly.
(b) If the noncomplying plan
reduces its benefits so that the covered person 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 as established in paragraph (3)1. through 4. of this subsection,
then the complying plan shall advance to or on behalf of the covered person an
amount equal to the difference.
The complying plan shall not advance more than the complying plan would have
paid had it been the primary plan less any amount it previously paid for the
same expense or service, and:
consideration of the advance, the complying plan shall be subrogated to all
rights of the covered person against the noncomplying plan; and
2. The advance by the complying plan shall
also be without prejudice to any claim it may have against a noncomplying plan
in the absence of subrogation.
(3) Coordination of benefits differs from
subrogation. Provisions for one (1) may be included in health care benefits
contracts without compelling the inclusion or exclusion of the other.
(4) If the plans cannot agree on the order of
benefits within thirty (30) calendar days after the plans have received all of
the information needed to pay the claim, the plans shall immediately pay the
claim in equal shares and determine their relative liabilities following
payment, except that a plan shall not be required to pay more than it would
have paid had it been primary.