3 Colo. Code Regs. § 702-4-6-2-B
IMPORTANT NOTICE This is a summary of only a few of the provisions of your health plan to help you understand coordination of benefits, which can be very complicated. This is not a complete description of all of the coordination rules and procedures, and does not change or replace the language contained in your insurance contract, which determines your benefits.
Double Coverage
It is common for family members to be covered by more than one health care plan. This happens, for example, when a husband and wife both work and choose to have family coverage through both employers.
When you are covered by more than one group health plan, state law permits your carriers to follow a procedure called "coordination of benefits" to determine how much each should pay when you have a claim. The aim is to make sure that the combined payments of all plans do not add up to more than your covered health care expenses.
Coordination of benefits (COB) is complicated, and covers a wide variety of circumstances. This is only an outline of some of the most common ones. If your situation is not described, read your evidence of coverage or contact your state insurance department.
Primary or Secondary?
You will be asked to identify all the plans that cover family members. We need this information to determine whether we are "primary" or "secondary." The primary plan always pays first.
Any plan which does not contain your state's COB rules will always be primary.
When This Plan is Primary
If you or a family member are covered under another plan in addition to this one, we will be primary when:
Your Own Expenses
The claim is for your own health care expenses, unless you are covered by Medicare and both you and your spouse are retired.
Your Spouse's Expenses
The claim is for your spouse, who is covered by Medicare, and you are not both retired.
Your Child's Expenses
The claim is for the health care expenses of your child who is covered by this plan and
You are married and your birthday is earlier in the year than your spouse's or you are living with another individual, regardless of whether or not you have ever been married to that individual, and your birthday is earlier than that other individual's birthday. This is known as the "birthday rule";
or
You are separated or divorced and you have informed us of a court decree that makes you responsible for the child's health care expenses;
or
There is no court decree, but you have primary custody of the child.
Other Situations
We will be primary when any other provisions of state or federal law require us to be.
How We Pay Claims When We Are Primary
When we are the primary plan, we will pay the benefits provided by your contract, just as if you had no other coverage.
How We Pay Claims When We Are Secondary
We will be secondary whenever the rules do not require us to be primary.
When we are the secondary plan, we do not pay until after the primary plan has paid its benefits. We will then pay part or all of the allowable expenses left unpaid. An "allowable expense" is a health care service or expense covered by one of the plans, including copayments and deductibles.
* If there is a difference between the amount the plans allow, we will base our payment on the higher amount. However, if the primary plan has a contract with the provider, our combined payments will not be more than the contract calls for. Health maintenance organizations (HMO) and preferred provider organizations (PPO) usually have contracts with their providers.
* We will determine our payment by subtracting the amount the primary plan paid from the amount we would have paid if we had been primary. We will use any savings to pay the balance of any unpaid allowable expenses covered by either plan.
* If the primary plan covers similar kinds of health care, but allows expenses that we do not cover, we may pay for those expenses. We will not pay an amount the primary plan didn't cover because you didn't follow its rules and procedures. For example, if your plan has reduced its benefit because you did not obtain pre certification, we will not pay the amount of the reduction, because it is not an allowable expense.
Questions About Coordination of Benefits?
Colorado Division of Insurance
1560 Broadway, Suite 850
Denver, CO 80202
Phone Number: 303-894-7490 or 1-800-930 -3745
3 CCR 702-4-6-2-B