Archive for the ‘Coordination of Benefits’ Category

The highest appellate courts of Maryland and Montana handed down decisions relating to the method by which insured group health plans and the personal insurance protection (PIP) benefits are to be coordinated. In both cases, a group plan refused to cover medical expenses for which PIP reimbursement is provided through auto liability policies. The courts came up with different results. Read more

High courts of Maryland and Montana handed down contrasting decisions relating to coordination of insured group-health and personal insurance protection (PIP) benefits. in both cases, a group plan refused to cover medical expenses for which PIP reimbursement was provided through auto liability policies. In Maryland, a court gave precedence to a provision saying group plans can coordinate with any entity that paid health expenses. Montana’s insurance commissioner threw out Blue Cross’ (BCBS) group-plan enrollment forms, which reserved the right to not pay for an injured member who received or benefits from liability insurers. The court rebuffed BCBS’ challenge, ruling that the Blue would be entitled to subrogation only after it paid benefits to its insured.

A problem that rarely came up before is arising now. Until recently, very few cases involved a person with both group and non-group (also known as individual or family) health coverage. Indeed modern courts rarely had a chance to consider the problem of how to coordinate such coverage. Read more

A problem that rarely came up before is arising now. Until recently, few cases involved coordinating health benefits for people who have both group and non-group coverage. However, because health reform will almost certainly result in more people being covered by non-group policies, plan sponsors should get a better understanding of the issue. The same issue is getting attention from state regulators. Nine of 10 states that use the 2005 NAIC model COB rule allow group and non-group policies to coordinate their benefits. Only one state – Idaho – mandates that non-group policies be always secondary; the other 49 states have no description on how group and non-group coverage are to be coordinated.

In the waning days of 2007, with the cost of health care continually escalating and with more and more of the costs being borne by the United States Government, Congress passed and President Bush signed into law the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA). With the stroke of his pen, the President created a responsibility for self insured organizations, liability insurers, group health plans and non-group health plans that pay bodily injury claims to insure that the Medicare system is protected from bearing the costs of current and future medical expenses if those expenses are the primary responsibility of an entity other than Medicare. Entities making such payments are known as RREs. Read more

Jerry Geisel

WASHINGTON—Eleventh-hour congressional action extending a COBRA premium subsidy law assures continuation of the subsidy for millions of laid-off workers and their families, but also more work for employers.

Ending weeks of uncertainty, Congress gave final approval and President Obama signed into law late last month a Department of Defense spending bill that includes provisions extending COBRA premium subsidies. Read more

Joanne Wojcik

For many benefit managers, the economic downturn resulted in a domino effect of events this year.

Perhaps the single biggest benefits event came early, when Congress enacted the American Recovery and Reinvestment Act of 2009, which provided a 65% subsidy to laid-off workers who purchased COBRA coverage from their employers. Read more

Employer cuts costs by allowing workers to ‘earn’ lower rates

Joanne Wojcik

PHOENIX—Safeway Inc. has reduced its health care cost increases by more than $150 million since 2005 using an approach that closely resembles how auto insurers rate drivers. Read more

Starting April 1, group health plans must offer a special enrollment right and coordinate coverage for individuals who are either entering or exiting state health coverage programs. Under the law reauthorizing the State Children’s Health Insurance program (SCHIP), plans and insurers must allow an employee or dependent to enroll under the terms of the plan if: (1) he or she loses SCHIP (or Medicaid) eligibility and asks to be covered under the group plan within 60 days; or (2) he or she becomes eligible for premium assistance under SCHIP or Medicaid to buy group health coverage and asks to be covered within 60 days of that eligibility determination. Plans must meet minimum creditable standards to enable individuals to receive premium support. Read more

Motor vehicle insurance policies usually include personal injury protection (PIP) coverage that will reimburse the insured and/or a family member for a limited amount of medical expenses regardless of who was at fault. Many current motor vehicle policies limit the PIP coverage to relatively small amounts if the injured person has other health coverage. The general idea of that approach is to provide greater PIP coverage, but to permit the auto insurer to have secondary liability if the injured person has other coverage. Read more

Cooper v. Premera Blue Cross, Slip Copy, 2008 WL 2180148 (W.D.Wash.) (May 23, 2008) addresses a risk often overlooked by plan participants when debating over their benefit plan’s right of reimbursement from other liable insurance carriers.

Cooper suffered multiple injuries while he was a passenger involved in an ATV accident and applied for benefits through his own auto carrier, Allied Insurance, because the driver’s vehicle was uninsured.  Cooper received $64,200 for medical expenses and lost wages through his PIP and UM coverage. Read more

Magellan Services v. Highmark Life Insurance Company, – N.W.2d –, 2008 WL 2221979 (Iowa) (May 30, 2008) brought forward a dispute about coordination of benefits against an ERISA preemption of state regulation of a self-funded health plan based upon the presence of stop loss coverage. Read more

Under a new MSP reporting requirement, plans working through an insurer, third party administrator (TPA) or plan administrator will have to disclose information on situations in which the group health plan was primary in relation to Medicare.

The requirement is at Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007, passed by both chambers of Congress and signed into law on Dec.29. (P. Law No. 110-173) Its effective date will be Jan. 1, 2009. Read more

Recently, the Eastern District Court of Michigan held in Citizens Insurance Company of America v. Pitney Bowes Software Systems Employee Medical & Health Care Service Corp., 2007 WL 713144 (E.D. Mich 2007) that where the Plan document excluded claims covered by automotive insurance in its claim exclusions section, and asserted a right to coordinate benefits with the same types of insurance, these provisions were contradictory and cancelled each other out.   This is why The Phia Group matches exclusion language with coordination of benefits and subrogation language, and advises the use of language interpretation provisions as well. Read more

In Cheryl Street v. Ingalls Memorial Hospital, (2007 U.S. Dist. Lexis 18643), the Northern District Court of Illinois held on March 15, 2007 that just as a Plan must identify funds prior to seeking equitable relief in Federal Court, so too must relief sought by participants be specifically identifiable. In one case, decided by the Third Circuit Court of Appeals, a group of employee Plan Participants brought their Plan Administrator to court for handling their assets in an irresponsible manner. In Eichorn, et al. v. AT&T Corp., et al., 484 F.3d 644, (May 2, 2007), the Court held that while ERISA makes it illegal for a Plan Administrator to prevent the attainment of rights provided by the Plan, actions that lessen the value of the rights are not so prohibited. As such, in a case like this one, the only relief available was in the form of monetary awards and back pay, which is not “equitable relief” for purposes of Federal jurisdiction. Read more