Wyo. Code R. 044-0002-10
General Agency, Board or Commission Rules
Chapter 10: Use of Overinsurance Reduction of Benefit Provisions Group Disability
Effective Date: 12/31/1996 to 01/26/2023
Rule Type: Superceded Rules & Regulations
Reference Number: 044.0002.10.12311996
REGULATIONS AND GUIDELINES RELATING TO THE USE OF OVERINSURANCE REDUCTION OF BENEFIT PROVISIONS IN GROUP DISABILITY INSURANCE POLICIES AND GROUP SERVICE PLAN CORPORATION CONTRACTS
Section 1. Authority
These regulations are adopted by the commissioner pursuant to W.S. 26-2-110 and W.S. 26-15-111.
Section 2. Purpose
The purpose of these regulations is to establish uniformity in the permissive use of overinsurance provisions to avoid claim delays and misunderstandings that otherwise result from the use of inconsistent or incompatible provisions among the several carriers which may deceptively affect the risk purported to be assumed.
Section 3. Applicability
These regulations do not require the use of overinsurance provisions in group disability insurance policies or group service plan contracts. If, however, such policies or contracts contain overinsurance provisions, such provisions shall be consistent with these regulations. Overinsurance provisions, or provisions for the reduction of benefits otherwise payable because of other insurance by whatever name designated, other than in conformity with these regulations, shall not be used, except that plans of coverage designated to be supplementary to the policyholder's underlying basic plan of coverage may provide that its coverage shall be excess to that specific policyholder's plan of basic coverage from whatever source provided.
Section 4. Benefits Subject to this Provision
All of the benefits provided under a policy or contract are subject to these regulations.
Section 5. Definitions and Procedures
(a) "Plan" means any plan providing benefits or services for or on account of medical or dental care or treatment, which benefits or services are provided by:
(i) group, blanket or franchise insurance coverage;
(ii) service plan contracts, group practice, individual practice and other prepayment coverage;
(iii) any coverage under labor-management trusteed plans, union welfare plans, employer organization plans, or employee benefit organization plans; and
(iv) any coverage under government programs, and any coverage required or provided by statute.
(b) The term “Plan” shall be construed separately with respect to each policy, contract, or other arrangement for benefits or services and separately with respect to that portion of any such policy, contract, or other arrangement which reserves the right to take the benefits or services of other plans into consideration in determining its benefits and that portion which does not.
(c) The definition of a “Plan” within the COB provision of group contract shall enumerate the types of coverage which the insurer may consider in determining whether overinsurance exists with respect to a specific claim. Such definition:
(i) Shall not include individual or family policies, or individual or family subscriber contracts, except as provided in this subsection.
(ii) May include all group policies or group subscriber contracts as well as such group-type contracts as are not available to the general public and can be obtained and maintained only because of the covered person’s membership in or connection with a particular organization or group. Such group-type contracts may be included in the definition, at the option of the insurer, whether or not individual policy forms are utilized and whether the group-type coverage is designated as “franchise” or “blanket” or in some other fashion.
(iii) Shall not include group or group-type hospital indemnity benefits written on a non-expense incurred basis unless they are characterized as reimbursement type benefits and are designed or administered so as to give the insured the right to elect indemnity type benefits, in lieu of such reimbursement type benefits, at the time of claim.
(iv) School accident type coverages written on either an individual, group, blanket, or franchise basis shall not be taken into consideration in coordination of benefits.
(v) If “Medicare” or similar governmental benefits are included in the definition of a “Plan,” such benefits shall be considered without expanding any of the definitions of this provision beyond the hospital, medical, and surgical benefits as may be provided by the governmental program.
(vi) A plan may not coordinate or design benefits so that the benefits payable are altered solely on the basis that:
(A) another plan exists; or
(B) the claimant is or could have been covered under another plan; or
(C) the claimant has elected an option under another plan providing a lower level of benefits than another option for which the claimant was eligible.
(vii) Shall not include any policy providing coverage for a specified disease.
(d) “Allowable Expense” means any necessary, reasonable and customary item of expense at least a portion of which is covered under at least one of the plans covering the person for whom claim is made.
(e) When a plan provides benefits in the form of services rather than cash payments, the reasonable cash value of each service rendered shall be deemed to be both an allowable expense and a benefit paid.
(a) The benefits of a plan which covers the person upon whose medical expense the claim is based other than as a dependent shall be determined before the benefits of a plan which covers such person as a dependent;
(b) Until June 30, 1985, the benefits of a plan which covers the person upon whose medical expenses the claim is based as a dependent of a male person shall be determined before the benefits of a plan which covers such person as a dependent of a female person; provided, that in the case of a person for whom claim is made as a dependent child:
(i) when the parents are separated or divorced and the parent with custody of the child has not remarried, the benefits of a plan which covers the child as a dependent of the parent with custody of the child will be determined before the benefits of a plan which covers the child as a dependent of the parent without custody;
(ii) when the parents are divorced and the parent with custody of the child has remarried, the benefits of a plan which covers the child as a dependent of the parent with custody shall be determined before the benefits of a plan which covers that child as a dependent of the stepparent, and the benefits of a plan which covers that child as a dependent of the stepparent will be determined before the benefits of a plan which covers that child as a dependent of the parent without custody.
(iii) Notwithstanding paragraphs (i) and (ii) herein, if there is a court decree which would otherwise establish financial responsibility for the medical, dental or other health care expenses with respect to the child, the benefits of a plan which covers the child as a dependent of the parent with such financial responsibility shall be determined before the benefits of any other plan which covers the child as a dependent.
(c) On and after July 1, 1985, the following provisions shall govern:
(i) Except for cases of a person for whom claim is made as a dependent child whose parents are separated or divorced, the benefits of a plan which covers the person upon whose medical expenses the claim is based as a dependent of a person whose date of birth, excluding year of birth, occurs earlier in a calendar year, shall be determined before the benefits of a plan which covers such person as a dependent of a person whose date of birth, excluding year of birth, occurs later in a calendar year. If a plan does not have the provisions of this paragraph and such absence would result either in each plan determining its benefits before the other or in each plan determining its benefits after the other, this paragraph shall not apply and the order of benefit determination of the plan not having the provisions of this paragraph shall be utilized.
(ii) In the case of a person for whom claim is made as a dependent child whose parents are separated or divorced and the parent with custody of the child has not remarried, the benefits of a plan which covers the child as a dependent of the parent with custody of the child will be determined before the benefits of a plan which covers the child as a dependent of the parent without custody;
(iii) In the case of a person for whom claim is made as a dependent child whose parents are divorced and the parent with custody of the child has remarried, the benefits of a plan which covers the child as a dependent of the parent with custody shall be determined before the benefits of a plan which covers that child as a dependent of the stepparent, and the benefits of a plan which covers that child as a dependent of the stepparent will be determined before the benefits of a plan which covers that child as a dependent of the parent without custody;
(iv) In the case of a person for whom claim is made as a dependent child whose parents are separated or divorced, where there is a court decree which would otherwise establish financial responsibility for the medical, dental or other health care expenses with respect to the child, then, notwithstanding paragraphs (ii) and (iii) herein, the benefits of a plan which covers the child as a dependent of the parent with such financial responsibility shall be determined before the benefits of any other plan which covers the child as a dependent child.
(v) When the application of these provisions is not dispositive, the benefits of a plan which has covered the person on whose expenses claim is based for the longer period of time shall be determined before the benefits of a plan which has covered such person the shorter period of time, provided that:
(A) If the person upon whose expenses the claim is based is a laid-off or retired employee, or the dependent of same, the benefits of the plan providing coverage to him or his dependent as such shall be determined after the benefits of any other plan covering such person as an employee, other than as a laid-off or retired employee, or dependent of same. If neither plan has a provision regarding laid-off or retired employees and such absence would result in each plan determining its benefits after the other, this subparagraph shall not apply.
(d) When a claim under a plan with a COB provision involves another plan which also has a COB provision, the carriers involved shall use the above rules to decide the order in which the benefits payable under the respective plan will be determined.
Whenever payments have been made by an insurer with respect to allowable expenses in a total amount, at any time, in excess of the maximum amount of payment required by its contract requirements, insurer or service plan shall have the right to recover such excess payments from among one or more of the following, as the insurer or service plan shall determine: any person to, or for, or with respect to whom such payments were made, any other insurers or service plans, or any other organizations.
This regulation shall become effective on the first day of April, 1985. The provisions of this regulation shall apply to all policy and contract forms subject to this regulation which are issued on or after the effective dates. All policy and contract forms subject to this regulation which were issued prior to its effective date shall be brought into compliance with the requirements of this regulation at the next anniversary date or renewal date of the group policy or contract.
FOR
Amendments to Chapter 10 of Wyoming Insurance Department Regulation
Regulations and Guidelines Relating To the Use Of Overinsurance Reduction Of Benefit Provisions In Group Disability Insurance Policies And Group Service Plan corporation Contracts Plan Corporation Contracts
The only amendments to this Chapter are to change the chapter numbering and the chapter pagination.
Presently the Chapter is designated by the Roman number symbol “X.” It will be amended to be designated by the Arabic number symbol “10.”
Pagination of the chapter will be amended from the present continuous and sequential numbering from chapter-to-chapter, to chapter-specific numbering. As an example, each page will be designated first by a chapter number and then page number, as in 10-1, 10-2, 10-3, etc. Amending the method by which the pages are numbered will allow for simpler amendments in the future, and for easier reader identification of the chapter and pages with which they are concerned.