(1) (a) The primary plan must pay or provide its benefits as if the secondary plan or plans did not exist. A secondary plan may take the benefits of another plan into account only if, under these rules, it is secondary to that other plan.

(b) (i) The word "birthday" in the wording shown in subsection (4) (c) (ii) (B) of ARM 6.6.2404 refers only to month and day in a calendar year, not to the year in which the person was born.

(ii) A group contract that includes a COB provision and that is issued or renewed or has an anniversary date on or after the effective date of these rules must include the substance of the provision in subsection (4) (c) (ii) (B) of ARM 6.6.2404.

(c) (i) To determine the length of time a person has been covered under a plan, two plans are treated as one plan if the claimant was eligible under the second plan within 24 hours after the first plan ended. Thus, the start of a new plan does not include:

(A) a change in the amount or scope of a plan's benefits;

(B) a change in the entity that pays, provides, or administers the plan's benefits; or

(C) a change from one type of plan to another (such as, from a single employer plan to that of a multiple employer plan) .

(ii) The length of time that a claimant is covered under a plan is measured from the claimant's first date of coverage under that plan. If that date is not readily available, the date the claimant first became a member of the group must be used as the date from which to determine the length of time the claimant's coverage under the present plan has been in force.

(2) (a) A secondary plan may reduce its benefits in the following manner or any manner that is more favorable to a covered person. When this alternative is used, a secondary plan 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. The amount by which the secondary plan's benefits have been reduced must be used by the secondary plan to pay allowable expenses, not otherwise paid, that were incurred during the claim determination period by the person for whom the claim is made. As each claim is submitted, the secondary plan determines its obligation to pay for allowable expenses based on all claims which were submitted up to that point in time during the claim determination.

(b) When this alternative is used, the suggested contract provision is as shown in subsection (4) (d) (ii) of ARM 6.6.2404.

(c) The last paragraph quoted in subsection (4) (d) (ii) of ARM 6.6.2404 may be omitted if the plan provides only one benefit, or may be altered to suit the coverage provided.

(3) A secondary plan that provides benefits in the form of services may recover, from the primary plan, the reasonable cash value of providing the services, to the extent that benefits for the services are covered by the primary plan and have not already been paid or provided by the primary plan. Nothing in this subsection may be interpreted to require a plan to reimburse a covered person in cash for the value of services provided by a plan that provides benefits in the form of services.

(4) (a) Some plans with order of benefit determination rules not consistent with these rules declare that the plan's coverage is "excess" to all others, or "always secondary." This occurs because:

(i) certain plans may not be subject to insurance regulation; or

(ii) some group contracts have not yet been conformed with these rules pursuant to ARM 6.6.2402.

(b) A plan with order of benefit determination rules that comply with these rules (herein called a complying plan) may coordinate its benefits with a plan that is "excess" or "always secondary" or that uses order of benefit determination rules which are inconsistent with those contained in these rules (herein called a noncomplying plan) on the following basis:

(i) If the complying plan is the primary plan, it must pay or provide its benefits on a primary basis.

(ii) If the complying plan is the secondary plan, it must, nevertheless, pay or provide its benefits first, but the amount of the benefits payable must be determined as if the complying plan were the secondary plan. In such a situation, such payment is the limit of the complying plan's liability.

(iii) If the noncomplying plan does not provide the information needed by the complying plan to determine its benefits within a reasonable time after it is requested to do so, the complying plan must assume that the benefits of the noncomplying plan are identical to its own and must pay its benefits accordingly. However, the complying plan must adjust any payments it makes based on that assumption whenever information becomes available as to the actual benefits of the noncomplying plan.

(iv) If:

(A) the noncomplying plan reduces its benefits so that the employee, subscriber, or member receives less in benefits than he or she would have received had the complying plan paid or provided its benefits as the secondary plan and the noncomplying plan paid or provided its benefits as the primary plan; and

(B) governing state law allows the right of subrogation set forth below;

then the complying plan must advance to or on behalf of the employee, subscriber, or member an amount equal to such difference. However, the complying plan may not advance more than the complying plan would have paid had it been the primary plan less any amount it previously paid. In consideration of an advance, the complying plan must be subrogated to all rights of the employee, subscriber, or member against the noncomplying plan. An advance by the complying plan must also be without prejudice to any claim it may have against the noncomplying plan in the absence of a subrogation.

(5) A term such as "unusual and customary," "usual and prevailing," or "reasonable and customary," may be substituted for the term "necessary, reasonable and customary." Terms such as "medical care" or "dental care" may be substituted for "health care" to describe the coverages to which the COB provision apply.

(6) The COB concept clearly differs from that of

subrogation. Provisions for one may be included in health care

benefits contracts without compelling the inclusion or

exclusion of the other.