BENEFIT DETERMINATION
Order of Benefit Determination
Important Information About Medicare
PREFERRED PROVIDERS
A Preferred Provider Organization (PPO) is a group of doctors, hospitals and other medical providers who have agreed to provide their services at negotiated rates. One or more PPOs have agreed to provide services to persons who are covered under this plan. Providers who are a part of these PPOs are called “in-network providers.” All other providers are called “out-of-network providers.” The plan does not require anyone to use an in-network provider. However, the plan does pay a higher coinsurance percentage when a person uses an in-network provider. In general, the coinsurance percentage for in-network providers is 80%; it is 50% for out-of-network providers. The employer will provide information in a separate booklet listing the PPOs that the plan uses and the names of the in-network providers.
Benefits for properly filed claims will be determined in accordance with this section.
ABOUT THIS SECTION: The Benefit Calculations section of this plan describes how the plan uses deductibles, co payments and coinsurance percentages to determine benefit amounts.
Individual Deductible: The individual deductible is the amount of covered charges that a covered person must incur each calendar year before the plan will pay benefits. The plan will never pay any benefits for any charge credited to the individual deductible. The individual deductible is listed in the Schedule of Benefits.
Deductible Carry-Over: Covered charges which a covered person incurs during October, November or December and which are credited to that person’s deductible for that year will also be credited to his deductible for the following year.
Common Accident Deductible: If two or more covered persons in a family are injured in a single accident, the plan will impose only one individual deductible for covered charges incurred in connection with that accident.
Family Deductible: The family deductible is the maximum amount of covered charges which the plan will credit to the combined individual deductibles of a participant and his covered dependents in a calendar year. Once a participant and his covered dependents have met the family deductible, the plan will not credit any additional charges to any individual deductible for those persons for the rest of that calendar year. The family deductible is listed in the Schedule of Benefits.
The coinsurance percentage is the percentage of covered charges which the plan will pay once the individual or family deductible has been met. It is listed in the Schedule of Benefits. The coinsurance percentage may vary depending on whether the covered charges are incurred with an in-network or out-of-network provider. The employer will make information available on the physicians and facilities that are in network providers.
Individual: After a covered person’s share of covered charges incurred during a calendar year (over and above charges credited to the office visit co-payments, the emergency room co-payments and the deductible) equals the applicable individual out-of pocket maximum specified in the Schedule of Benefits, the plan will pay covered charges for that person at 100% for the remainder of the calendar year.
Family: After the share of covered charges incurred by a participant and his covered dependents during a calendar year (over and above charges credited to the office visit co-payments, emergency room co-payments and the deductible) equals the applicable family out-of-pocket maximum specified in the Schedule of Benefits, the plan will pay covered charges for those persons at 100% for the remainder of the calendar year.
Exceptions and Limitations: Charges incurred by a covered person for the following will never be credited to any out-of-pocket maximum:
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charges credited to a deductible or charges credited to office visit or emergency room co-payments.
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prescription drug charges.
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charges a person must pay due to non-compliance with the requirements set out in the precertification section of this plan.
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charges for any service or supply in excess of the maximum benefit applicable to that service or supply.
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charges which are not covered charges.
In addition, the plan will never pay any benefits in excess of any maximum benefit or other limit specified in this plan.
The intent of Coordination of Benefits with other benefits is to provide that the sum of benefits paid under the provisions of this plan plus benefits paid under all other plans does not exceed 100% of total allowable expenses.
For the purposes of this section, the following definitions apply:
"Plan" means any medical or dental expense benefits provided under:
1. any insured or non-insured group, service, prepayment, or other program arranged through an employer, trustee, union, or association;
2. any program required or established by state or federal law (including Medicare Part A and B);
3. any program sponsored by or arranged through a school or other educational agency; or
4. the first-party medical expense provisions of any automobile policy.
The term plan does not include benefits under:
1. a student accident policy; or
2. a state medical assistance program.
"Allowable Expense" means all reasonable, customary, and usual charges for treatment or service where at least part of those charges are covered under at least one of the plans then in force for the person for whom benefits are claimed. However, the difference between the cost of a private room and the cost of a semi-private room will be an Allowable Expense only when confinement in a private room is medically necessary.
If a plan provides benefits in a form other than cash payments, the cash value of those benefits will be both an Allowable Expense and a benefit paid. "Claim Determination Period" means the part of the Calendar Year during which a covered person would receive benefit payments under this plan if this section were not in force.
Order of Benefit Determination
When a covered person is covered by two or more plans, it is necessary to determine which plan pays first, second, and so on. The guidelines that are used in establishing the payment order are called the Order of Benefit Determination. Except as described under the Medicare Exception section, the benefits payable under a plan that does not have a Coordination of Benefits provision similar to the provision described in this section will be determined first and then the benefits of this plan will be determined second.
In all other instances, the Order of Benefit Determination will be:
1. NON-DEPENDENT/DEPENDENT. A Plan which covers a person directly (i.e., other than as a dependent) is primary over a Plan that covers a person as a dependent.
2. DEPENDENT CHILD-Parents Not Separated or Divorced (Birthday Rule). When this plan and another plan cover the same child as a dependent of different persons called "parents,” the benefits of the plan of the parent whose birthday falls earlier in the Calendar Year will be determined first. The benefits of the plan of the parent whose birthday falls later in that year will be determined second. If both parents have the same birthday the benefits of the plan which has covered the parent longer will be determined first and the benefits of the other plan will be determined second. However, if the other plan does not have the Birthday Rule, but instead has a rule based on the gender of the parent, and as a result the plans do not agree on the order of benefits, the rule of the other plan will control which plan's benefits will be determined first.
3. DEPENDENT CHILD-Separated or Divorced Parents. If two or more plans cover a child of divorced or separated parents, benefits for the child are determined in this order:
a. first, the benefits of the plan of the parent with custody of the child;
b. then, the benefits of the plan of the parent without custody of the child.
However, if the specific terms of a court decree state that:
a. one of the parents is responsible for the medical care expenses of the child, and the plan of the parent obligated to pay or provide the benefits has actual knowledge of those terms, the benefits of that plan are determined first; or
b. the parents shall share joint custody, without stating that one of the parents is responsible for the medical care expenses of the child, the plans covering the child shall follow the Order of Benefit Determination rules outlined in DEPENDENT CHILD-Parents Not Separated or Divorced.
4. ACTIVE/INACTIVE EMPLOYEE. The benefits of a plan which covers a person as an employee who is neither laid-off nor retired, or as that employee's dependent, are determined first. The benefits of the plan which covers that person as a laid off or retired employee, or as that employee's dependent, are determined second. For a person whose coverage is provided under a right of continuation of coverage under federal or state law, the benefits of the plan which covers the person as an employee, member or subscriber, or that person's dependent will be determined first. The benefits of the plan which covers the person under the continuation of coverage will be determined second.
5. LONGER/SHORTER LENGTH OF COVERAGE. If none of the above rules determine the order of benefits, the benefits of the plan which covered an employee, member or subscriber or dependent longer are determined first. The benefits of the plan which covered that person for the shorter time are determined second. When this plan is secondary, the insolvency, refusal or inability of the primary plan to pay benefits due shall not cause this plan to become primary or increase the amount payable under this plan as secondary payer. In no event shall this Coordination of Benefits provision require this plan to pay more than it would pay in the absence of any other coverage.
When it is determined that this plan is a secondary plan, it may reduce its benefits so that the total benefits paid or provided by all plans during a claim determination period are not more than total Allowable Expenses. However, this does not apply when Medicare is primary.
When required by federal law, benefits payable under this plan will be determined before the benefits payable under Medicare for:
1. a participant (other than a retired participant age 65 or older); or
2. the dependent spouse age 65 or older of a participant (other than a retired participant.)
The primary/secondary rules may vary for:
1. a participant or covered dependent under age 65 who is disabled; or
2. a participant or covered dependent with End-Stage Renal Disease (ESRD).
This plan will be secondary to Medicare to the fullest extent allowed by Federal law. When this plan is secondary to Medicare, it will reduce benefits based on what Medicare would pay under Part A and Part B, even if the covered person is not enrolled in Part A or Part B. This plan will subtract the Medicare benefit from Allowable Expenses. It will then determine regular plan benefits (including reductions for co-payments, deductible and coinsurance) on the balance. For Medicare eligible retirees living or traveling outside the United States, the plan administrator will estimate the Medicare payment and determine benefits on the same basis as a Medicare eligible retiree receiving treatment in the United States.
Any person who claims benefits under this plan must, upon request, provide all information which this plan needs to coordinate benefits. In addition, all information which this plan needs to coordinate benefits can and will be exchanged with other companies, organizations, or persons.
This plan may reimburse any other plan if the other plan paid benefits that should have been paid under this plan in accordance with this section. In such cases, the reimbursement amounts will be considered benefits paid under this plan and, to the extent of those amounts, will relieve this plan from liability.
If this plan has paid benefits which should have been paid by another plan, this plan will have the right to recover those payments from the person to or for whom the benefits were paid and/or the other companies or organizations liable for the benefit payments.
Important Information About Medicare
Medicare may affect plan benefits. Therefore, covered persons may want to contact their local Social Security office for information about Medicare.
This should be done before the covered person's 65th birthday.
ABOUT THIS SECTION: The plan has the right to recover benefits which it has paid for injuries if the injured person recovers any money as a result of that injury. This section describes that right.
Charges incurred by a covered person for illness or injury caused by a third party or for which a property and casualty insurer may be liable, regardless of the cause, are not covered charges unless the covered person first complies with the requirements set forth in this section. This includes but is not limited to third party coverage and any uninsured and underinsured motorist coverage. The covered person must promptly notify the plan of any such claim. No payment of any charge shall be considered a waiver of this provision.
The plan shall have subrogation rights with respect to such benefits.
The plan may make and pursue a claim directly against any party or insurer who is obligated to make payments of any kind as a result of the illness or injury.
If the covered person (or his estate) recovers any amount from any party or insurer alleged to be liable in connection with the acts or omissions that caused the illness or injury (whether by judgment, settlement or otherwise, and no matter how that amount may be characterized or designated), the covered person (or his estate) must reimburse the plan out of the amounts recovered for all benefits paid or to be paid by the plan as a result of the illness or injury. The plan shall have a lien against any recovery to the extent of benefits paid or to be paid along with any costs or fees incurred in asserting its rights under this provision.
The plan may require the covered person (or someone legally entitled to act on his behalf) to sign an agreement in form and substance acceptable to the plan administrator acknowledging and securing the plan’s rights under this provision and to provide information regarding any potential rights of recovery. No charges related to the illness or injury will be considered covered charges unless the covered person complies with this requirement. By accepting benefits under this plan, all covered persons agree to cooperate fully with the plan in its exercise of its rights to subrogation and reimbursement and to do nothing that would interfere with or diminish those rights.
The plan has a right to recover in full for all benefits paid even if the covered person (or his estate) does not receive full compensation for all costs, damages and injuries resulting from the acts or omissions. The plan is not responsible for, nor shall the amount of its claim be reduced by, any costs or fees incurred by or on behalf of the covered person in connection with the recovery.