Section 430. Coordination of benefits

A. New employees will receive and be required to respond to a coordination of benefits (COB) inquiry letter following enrollment in the health plan. Employees should notify the plan administrator if coverage changes during employment for them or a covered dependent. If a plan participant is eligible for coverage under two or more plans, the plans involved will share the responsibility for the participant's benefits according to these rules.

1. If the other coverage does not have COB rules substantially similar to the participant's health plan's rules, the other coverage will be primary.

2. If a covered person is enrolled as the employee under one coverage and as a dependent under another, generally the one that covers him as the employee will be primary. The plan that covers a person as an active employee, that is an employee who is neither laid off nor retired, or as a dependent of an active employee is the primary plan. The plan covering that same person as a retired or laid-off employee or as a dependent of a retired or laid-off employee is the secondary plan.

3. If a covered person is the employee under both coverages, generally the one that covers him for the longer period of time will be primary.

4. If the dependent is covered as a dependent on his parent's or parents' plan and is also covered as a dependent on his spouse's plan, the spouse's plan is primary.

5. If the covered person is enrolled as a dependent child under both coverages (for example, when both parents cover their child), typically the coverage of the parent whose birthday falls earliest in the calendar year will be primary.

6. Special rules apply when a covered person is enrolled as a dependent child under two coverages and the child's parents are living apart. Generally, the coverage of the parent or step-parent with custody will be primary. However, if there is a court order that requires one parent to provide health care for the child, that parent's coverage will be primary. If there is a court order that states the parents share joint custody without designating that one parent is responsible for medical expenses, the parent whose birthday falls earliest in the plan year will be primary.

7. If a covered active employee or employee's dependent is also covered by Medicare, the coverage provided by the employer is primary, unless Medicare eligibility is due to end stage renal disease and the coordination period has been exhausted.

8. If a covered retiree, survivor, or long-term disability participant, or a covered dependent of any of these, is eligible for Medicare, the Medicare-eligible member is not eligible for active employee coverage under the member's health plan, except during an end stage renal disease coordination period.

B. When the participant's health plan is the primary coverage, it pays first. When the participant's health plan is the secondary coverage, it pays second as follows:

1. The plan administrator calculates the amount the participant's health plan would have paid if it had been primary coverage, then coordinates this amount with the primary plan's payment. The participant's health plan's payment in combination with the other plan's payment will never exceed the amount the participant's health plan would have paid if it had been the participant's primary coverage.

2. Some plans provide services rather than making a payment (i.e., a group model HMO). When such a plan is the primary coverage, the participant's health plan will assign a reasonable cash value for the services and that will be considered the plan's primary payment. The participant's health plan will then coordinate with the primary plan based on that value.

3. In no event will the participant's health plan pay more in benefits as secondary coverage than it would have paid as primary coverage.

C. If the administrator provided primary coverage and discovers later that it should have provided secondary coverage, the administrator has the right to recover the excess payment from the employee or any other person or organization. If excess benefit payments are made on behalf of the employee, the employee must cooperate with the administrator in exercising its right of recovery.

D. Employees are obligated to supply the plan administrator all information needed to administer this coordination of benefits provision. This must be done before an employee is entitled to receive benefits under this plan. Further, the employees must agree that the administrator has the right to obtain or release information about covered services or benefits received. This right will be used only when working with another person or organization to settle payments for coordinated services. The employee's prior consent is not required.

Historical Notes

Derived from VR525-01-02 § 4.12, eff. November 21, 1990; amended, Volume 20, Issue 20, eff. July 16, 2004; Volume 30, Issue 14, eff. April 24, 2014.

Statutory Authority

§ 2.2-2818 of the Code of Virginia.