Authority: IC 27-1-3-7

Affected: IC 27-8-5-19

Sec. 12. (a) When a person is covered by two (2) or more plans, the primary plan must pay or provide its benefits as if the secondary plan or plans did not exist. The following apply:

1. (1) If the:

   1. (A) primary plan is a closed panel plan; and
   2. (B) secondary plan is not a closed panel plan;
2. the secondary plan shall pay or provide benefits as if it were the primary plan when a covered person uses a nonpanel provider, except for emergency services or authorized referrals that are paid or provided by the primary plan.

3. (2) When multiple contracts providing coordinated coverage are treated as a single plan under this rule:

   1. (A) this section applies only to the plan as a whole; and
   2. (B) coordination among the component contracts is governed by the terms of the contracts.
4. If more than one (1) carrier pays or provides benefits under the plan, the carrier designated as primary within the plan shall be responsible for the plan's compliance with this rule.

5. (3) If a person is covered by more than one (1) secondary plan, the order of benefits determination rules of this rule decide the order in which secondary plans benefits are determined in relation to each other. Each secondary plan shall take into consideration the benefits of:

   1. (A) the primary plan or plans; and
   2. (B) any other plan that under the rules of this rule has its benefits determined before those of that secondary plan.

(b) A plan that does not include a coordination of benefits provision consistent with this rule is always the primary plan unless the provisions of both plans state that the complying plan is primary. However, coverage that is obtained by virtue of membership in a group designed to supplement a part of a basic package of benefits may provide that the supplementary coverage shall be excess to any other parts of the plan provided by the contract holder. The following are examples:

1. (1) Major medical coverages that are superimposed over base plan hospital and surgical benefits.
2. (2) Insurance type coverages that are written in connection with a closed panel plan to provide out of network benefits.

(c) A plan may take the benefits of another plan into account only when, under this rule, it is secondary to that other plan. Each plan determines its order of benefits using the first of the rules in sections 12 through 16.5 [this section and sections 13 through 15.5] of this rule.

(d) The benefits of the plan that covers the person as an employee, member, subscriber, policyholder, or retiree (that is, other than as a dependent) are determined before those of the plan that covers the person as a dependent. If the person is a Medicare beneficiary, and, as a result of the provisions of Title XVIII of the Social Security Act and implementing regulations, Medicare is:

1. (1) secondary to the plan covering the person as a dependent; and
2. (2) primary to the plan covering the person as other than a dependent, such as a retired employee;

then the order of benefits is reversed so that the plan covering the person as an employee, member, subscriber, policyholder, or retiree is the secondary plan and the other plan covering the person as a dependent is the primary plan.

(Department of Insurance; 760 IAC 1-38.1-12; filed Feb 14, 1990, 3:30 p.m.: 13 IR 1172; readopted filed Sep 14, 2001, 12:22 p.m.: 25 IR 531; filed Sep 15, 2006, 2:02 p.m.: 20061011-IR-760050265FRA; readopted filed Nov 21, 2012, 4:15 p.m.: 20121219-IR-760120454RFA; readopted filed Nov 13, 2018, 10:02 a.m.: 20181212-IR-760180372RFA; readopted filed Oct 31, 2024, 3:52 p.m.: 20241127-IR-760230814RFA)