Situations That May Affect Your Coverage
Services and Provisions That Determine Medical Necessity
The Health Care Program includes services and provisions designed to assist you and to help ensure health care services are medically necessary and appropriate. These services and provisions may affect the benefits you are eligible to receive. For information about these services and provisions, see "Medical Necessity" and "Preauthorization, Concurrent Review, and Retrospective Review" in the Medical Plan section. Although described in the Medical Plan section for your convenience, these services and provisions apply to the Medical Plan, Prescription Drug Plan, Dental Plan, and Vision Plan.
Coordination of Benefits
Coordination of Benefits (COB) is a provision that applies to the Medical Plan and the Dental Plan. COB is a standard group health coverage provision designed to eliminate duplicate payments and establish the sequence in which benefits are paid. When a medical expense is covered by two plans, one plan (the "primary plan") pays its benefits for the expense first. After the primary plan has paid benefits, the other plan (the "secondary plan") may make additional payments, depending on its COB provision. No plan pays more than it would without a COB provision.
As an employee of a participating employer, the Plan is your primary plan. If your spouse has coverage with his or her employer, that employer's plan is primary for your spouse and the Plan is secondary.
When the Plan is secondary, it pays part or all of the difference between what the primary plan pays for eligible expenses and the total eligible expenses, but it will not pay more than the amount this Plan would otherwise pay.
If you have any questions about COB, please contact Member Services at (855) 979-5192.
The Plan's COB provision applies to the following types of health plans:
- Group, nongroup, blanket, or franchise insurance coverage,
- Group health maintenance organization or other prepayment coverage,
- Coverage under labor management trusteed plans, union welfare plans, employer organization plans, or employee benefit organization plans,
- Coverage for which any employer has contributed toward the cost or made payroll deduction, and
- Coverage under any tax-supported or government program to the extent permitted by law.
A plan without a COB provision is always the primary plan. If all the plans involved have a COB provision:
- The plan that covers the person other than as a dependent (for example, as an employee, member, policyholder, subscriber or retiree) is primary, and the plan that covers the person as a dependent is secondary. However, the plan that covers the person as a dependent is primary if all of the following three conditions are true: (i) the person is a Medicare beneficiary; (ii) Medicare is secondary (as a result of federal law) to the plan covering the person as a dependent; and (iii) Medicare is primary (as a result of federal law) to the plan covering the person as other than a dependent (e.g., a retired employee).
- When a child is covered by both parents' plans, the provision depends on whether the case involves separation or divorce.
- If the case does not involve separation or divorce, the plan of the parent born earlier in the calendar year is primary (the “birthday rule”). If both parents have the same birthday, the plan that has covered the parent longer is primary. When the parents are separated or divorced and a court decree establishes financial responsibility for a child's health care expenses or health care coverage, the benefits of a plan covering the child as a dependent of the parent with financial responsibility are determined before the benefits of any other plan covering the child as a dependent. If the parent with financial responsibility has no health care coverage for the dependent child’s health care expenses, but that parent’s spouse does, that parent’s spouse’s plan is the primary plan.
- When the parents are separated or divorced and a court decree states that both parents are responsible for the dependent child’s health care expenses or health care coverage, the birthday rule described above will determine the order of benefits.
- When the parents are separated or divorced and a court decree states that the parents have joint custody without specifying that one parent has responsibility for the health care expenses or health care coverage of the dependent child, the birthday rule described above will determine the order of benefits.
- When the parents are separated or divorced and there is no court decree allocating responsibility for the child’s health care expenses or health care coverage, the order of benefits for the child are as follows:
- The plan covering the custodial parent;
- The plan covering the custodial parent’s spouse;
- The plan covering the non-custodial parent; and
- The plan covering the non-custodial parent’s spouse.
- The following rule does not apply if the rule described in 1. can determine the order of benefits. The benefits of a plan covering a person as an active employee or as a dependent of an active employee are determined before the benefits of a plan covering that person as an inactive employee or as a dependent of an inactive employee.
- If none of the rules above apply, the plan covering the person the longest is primary.
- If the other plan does not contain provisions with the same order of benefit determination rules as this Plan's rules, that plan is primary.
If you or your dependent is covered by two plans, you should first file a claim with the primary plan. Once you receive an Explanation of Benefits (EOB) from the primary plan, you should submit the EOB and a copy of the original claim to the secondary plan for consideration.
If you are eligible for benefits from both the Plan (as the secondary plan) and another plan(s), and you do not file a claim for benefits from the other plan(s), the benefits payable by the Plan will be reduced. This reduction amount is based on the benefits that would have been payable by the other plan(s) had a claim been filed.
COB and Medicare
If you are an active employee when you reach age 65 and become eligible for Medicare, you and your spouse and eligible children can continue participating in the Plan on the same basis as any other employee. If you do continue your participation, the Plan will be the primary plan for you, and Medicare will be the secondary plan for you.
If your dependent is eligible for Medicare while you are an active employee, the Plan will be the primary plan for you and your dependent, and Medicare will be the secondary plan for your dependent.
If you or your dependent qualifies for Medicare coverage solely because of End-Stage Renal Disease, then Medicare will be the secondary plan and the Plan will be the primary plan for that individual for the first 30 months. Thereafter, Medicare will be the primary plan and the Plan will be the secondary plan.
These highlights of the Medicare coordination program are presented for general information purposes only. It is important for you to review your Medicare eligibility with the Social Security Administration because new laws may be enacted after this handbook is issued. The Plan will be administered in accordance with Medicare's coordination rules.
The Health Care Program has the right to recover overpayments made for any reason and payments made for benefits covered by a primary group health plan, government program, or statutory plan, such as workers' compensation. If you receive an overpayment, the Plan or the Plan’s claims administrator may withhold payment on future benefits for any covered family member until these payments have been recovered.
The Health Care Program may recover the amount of an overpayment from the person or entity who received such payment, from other payers and/or the person on whose behalf such payment was made. A member, health care provider, another benefit plan, insurer, or any other person or entity who receives an overpayment or on whose behalf such payment was made, shall return or refund the amount of such overpayment to the Health Care Program within 30 days of discovery or demand. The Plan Administrator shall have no obligation to secure payment for the expense for which the overpayment was made or to which it was applied. The member or other person or entity receiving an overpayment may not apply such payment to another expense.
The Plan Administrator shall have the sole discretion to choose who will repay the Health Care Program for an overpayment and whether such payment shall be reimbursed in a lump sum. When a member or other person or entity does not comply with the provisions of this section, the Plan Administrator shall have the authority, in its sole discretion, to deny payment of any claims for benefits by the member and to deny or reduce future benefits payable (including payment of future benefits for other injuries or illnesses) under the Health Care Program by the amount due as reimbursement to the Health Care Program. The reductions will equal the amount of the required reimbursement.
A health care provider and any other person or entity accepting assignment of Health Care Program benefits, in consideration of services rendered, payments and/or rights, agree to be bound by the terms of this Health Care Program and agree to submit claims for reimbursement in strict accordance with their state’s health care practice acts, International Classification of Diseases (ICD) standards, Current Procedural Terminology® (CPT) standards, Medicare guidelines, Healthcare Common Procedure Coding System (HCPCS) standards, or other standards approved by the Plan Administrator. Any payments made on claims for reimbursement not in accordance with the above provisions shall be repaid to the Health Care Program within thirty (30) days of discovery or demand or incur prejudgment interest of 1.5% per month. If the Health Care Program must bring an action against a member, health care provider or other person or entity to enforce the provisions of this section, then that member, health care provider or other person or entity agrees to pay the Health Care Program’s attorneys’ fees and costs, regardless of the action’s outcome.
Further, members, beneficiaries, estate, heirs, guardian, personal representative, or assigns (for this purpose, “covered persons”) shall assign, or be deemed to have assigned, to the Health Care Program their right to recover said payments made by the Health Care Program, from any other party and/or recovery for which the covered persons are entitled, for or in relation to facility-acquired condition(s), health care provider error(s), or damages arising from another party’s act or omission for which the Health Care Program has not already been refunded.
Missing Persons/Uncashed Checks
Any amount due under the Health Care Program that has not been claimed (including an uncashed check) within one year of becoming payable will be forfeited. Any amount forfeited in this manner will no longer be a liability of the Plan, provided that the Plan Administrator has exercised due and proper care in attempting to make the payment.
Plan Rights to Third-Party Payments
If the Plan pays any benefits or otherwise incurs any expenses or losses for you or your dependent because of an accident, injury, illness, sickness, or other condition which may have been caused by a third party (the "covered condition"), the Plan has certain rights to third-party payments related to that covered condition. The Plan’s rights to third-party payments are described below. If you have any questions about the Plan’s rights to third-party payments, contact the Plan Administrator.
The Plan’s rights to third-party payments include a right of subrogation. This right allows the Plan to be subrogated to any and all claims, demands, actions and rights of recovery of you or your dependent against a third-party, as well as the heirs, guardians, executors, or other representatives of you or your dependent who may initiate or have recovery rights against a third-party, on account of a covered condition. This means that the Plan has rights against any third-party who may have been responsible for the covered condition (including, but not limited to, any person, party, entity, insurance company, corporation, or firm). For example, if another person injures you or your dependent in an auto accident, the Plan can sue that person (or any other party responsible or liable for that person, such as that person's insurer) to recover any benefit amounts the Plan has paid in relation to such injury.
In addition to the Plan’s right of subrogation, the Plan has a property right to and equitable interest in any and all third-party payments made to or on behalf of you or your dependent on account of a covered condition. This right to and interest in third-party payments exists without regard to whether the Plan exercises its right of subrogation. The Plan’s equitable interest in such third-party payments means that third-party payments made to or on behalf of you or your dependent on account of a covered condition belong to the Plan, to the extent of benefits paid or expected to be paid in relation to such covered condition.
The Plan also has a right to offset benefits otherwise payable under the Plan against any amount belonging to the Plan as a result of the Plan’s rights to third-party payments. The Plan’s right of offset means that if you, your dependent, or your representative does not return any amounts belonging to the Plan as a result of the Plan’s rights to third-party payments, the Plan may recover part or all of the amount owed by offsetting that amount against benefits otherwise payable. The Plan’s right of offset exists with respect to benefits it has not paid (for previously incurred expenses) and to any future benefits otherwise payable under the Plan.
Here are some additional things you should know about the Plan's rights to third-party payments:
- The Plan's rights apply to any and all third-party payments for any expenses or losses related to the covered condition (including, but not limited to, payments or recoveries under no-fault coverage, malpractice, personal injury, pain and suffering, wrongful death, medical reimbursement, financial responsibility, uninsured or underinsured insurance coverage, and medical coverage of any type regardless of the purchaser).
- The Plan's rights come first from any recovery, regardless of source or fault, even if you or your dependent is not made whole for damages from the covered condition.
- The Plan's rights include an equitable lien upon any interest you may have in any third-party payment received by you or your dependent or that is obtained on your or your dependent’s behalf on account of the covered condition. This means that the Plan automatically has a lien upon any third-party payment received by you or your dependent. Subject to this equitable lien, the Plan generally pays benefits for the eligible expenses of a covered condition if you:
- Provide information on the incident, and sign and, if requested by the Plan, return an acknowledgement of the Plan’s rights to third-party payments to the Plan or claims administrator, and
- Sign and deliver any needed documents to the Plan or claims administrator, and
- Do whatever is necessary to secure the Plan's rights to third-party payments and ensure the return of any third-party payments belonging to the Plan, and
- Do nothing to prejudice or jeopardize the Plan's rights to third-party payments.
- You, your dependent, or your or your dependent's representative (including your or your dependent’s attorney) must hold in constructive trust for the Plan any third-party payment received in relation to a covered condition and belonging to the Plan pursuant to the terms of this provision. You must return to the Plan from that third-party payment the amount of any and all benefits that the Plan has paid in relation to the covered condition, as soon as the third-party payment is made, regardless of the source and regardless of fault. This includes payments and recoveries granted by whole, partial, or undifferentiated judgments.
- The Plan’s rights to third-party payments exist with respect to benefits it has already paid, benefits which it has not paid but for which expenses have been incurred, and estimated future benefits. The Plan will not be responsible in any way for any fees or costs associated with any payment or recovery you pursue unless the Plan agrees to do so in writing. The amount you must return to the Plan under this provision will not exceed the amount of the proceeds from the third-party payment (after the deduction of any reasonable attorney's fees the Plan agrees in advance to pay). However, this payment must be made to the Plan regardless of whether you, your dependent, or your representative is fully compensated for the covered condition.
- If the Plan takes legal action against you, your dependent, or your representative to enforce the Plan’s rights to third-party payments, then you, your dependent, or other representative will be responsible for paying all costs of collection, including reasonable attorneys’ fees of the Plan.
- The Plan’s rights to third-party payments does not limit your or your dependent's rights to proceed against any party for any expenses or other losses incurred due to the fault of a third party.
- If any amount belonging to the Plan as a result of its rights to third-party payments is returned to the Plan, the lifetime maximum benefit levels for you or your dependent(s) will be restored by a corresponding amount.
Administering Plan Provisions
To administer COB, third-party payments, and other provisions, the Plan and/or the claims administrator has the right to:
- Release to, or obtain from, any other organization or individual any claim information. In addition, any member claiming benefits from the Plan must provide the Plan or the claims administrator with any relevant information that may be required.
- Pay to any other organization an amount determined to be warranted if payments that should have been made by the Plan were made by that organization under any other plans.
- Recover from any person covered by the Plan any overpayment made by the Plan because of failure to report other coverage or for any other reason.