1. (a) As used in policies, certificates, and contracts relating to coordination of benefits (COB), "plan" means a form of coverage with which coordination is allowed. The definition of "plan" in the group contract must state the types of coverage which will be considered in applying the COB provision of that contract. The right to include a type of coverage is limited by the rest of this section.

   1. (1) The definition of "plan" in Form COB TX, which is adopted and incorporated by reference in this rule, is an example of what may be used. Any definition that satisfies this subsection may be used.
   2. (2) This subchapter uses the term "plan." However, a group contract may, instead, use "program" or some other term.

   3. (3) The term "plan" or any substitute for that term may include:

      1. (A) group insurance and group subscriber contracts;
      2. (B) uninsured arrangements of group or group-type coverage;
      3. (C) group or group-type coverage through HMOs and other prepayment, group practice, and individual practice plans;

      4. (D) group-type contracts which are contracts that are not available to the general public and can be obtained and maintained only because of membership in or connection with a particular organization or group. Group-type contracts answering this description may be included in the definition of plan, at the option of the insurer or the service provider and the contract client, whether or not uninsured arrangements or individual contract forms are used and regardless of how the group-type coverage is designated (for example, "franchise" or "blanket").

         1. (i) If the contract may not be renewed if the insured leaves the particular employer or organization, the contract would meet the definition of group-type coverage.
         2. (ii) If the contract allows for renewal regardless of continued employment or participation in an organization, the contract would meet the definition of group-type coverage only until such time that the insured leaves the particular employer or organization.
      5. (E) the amount by which group or group-type hospital indemnity benefits exceed $100 per day;
      6. (F) the medical benefits coverage in group, group-type and individual automobile "no fault" and traditional automobile "fault" type contracts; and
      7. (G) Medicare or other governmental benefits, except as provided in paragraph (4)(G) of this subsection. That part of the definition of "plan" may be limited to the hospital, medical, and surgical benefits of the governmental program.

   4. (4) The term "plan" or any substitute for that term shall not include:

      1. (A) individual or family insurance contracts;
      2. (B) individual or family subscriber contracts;
      3. (C) individual or family coverage through health maintenance organizations (HMOs);
      4. (D) individual or family coverage under other prepayment, group practice, and individual practice plans;
      5. (E) group or group-type hospital indemnity benefits of $100 per day or less;
      6. (F) school accident-type coverages which cover grammar, high school, and college students for accidents only, including athletic injuries, either on a 24-hour basis or on a "to and from school" basis; and
      7. (G) a state plan under Medicaid;
      8. (H) plans when, by law, their benefits are in excess of those of any private insurance plan or other nongovernmental plan.

2. (b) When used in policies, certificates, or contracts relating to COB, the term "primary plan" shall mean a plan whose benefits for a person's health care coverage must be determined without taking the existence of any other plan into consideration. A plan is a "primary plan" if either of the following conditions is true:

   1. (1) the plan either has no order of benefit determination rules, or it has rules which differ from those permitted by this subchapter. There may be more than one "primary plan"; or
   2. (2) all plans which cover the person use the order of benefit determination rules required by this regulation, and under those rules the plan determines its benefits first.
3. (c) When used in policies, certificates, or contracts relating to COB, the term "secondary plan" shall mean a plan which is not a "primary plan." If a person is covered by more than one "secondary plan," the order of benefit determination rules of these sections decide the order in which their benefits are determined in relation to each other. The benefits of each "secondary plan" may take into consideration the benefits of the "primary plan" or plans and the benefits of any other plan which, under the rules of this regulation, has its benefits determined before those of that "secondary plan."
4. (d) When used in policies, certificates, or contracts relating to COB, the term "this plan" shall refer to the part of the group or group-type contract providing the health care benefits to which the COB provision applies and which may be reduced because of the benefits of other plans. Any other part of the group or group-type contract providing health care benefits is separate from the part referred to as "this plan." A group or group-type contract may apply one COB provision to certain of its benefits (such as dental benefits), coordinating only with like benefits, and may apply other separate COB provisions to coordinate other benefits.

Source Note:The provisions of this §3.3506 adopted to be effective June 3, 1994, 19 TexReg 3938.