Ill. Admin. Code tit. 50 § 2009.20
The following words and terms, when used in this Part, shall have the following meanings unless the context clearly indicates otherwise:
"Allowable Expense" means the necessary, reasonable, and customary item of expense for health care when the item of expense is covered at least in part under any of the plans involved. Necessary, reasonable, and customary item of expense for health care shall be defined in the policy.
Notwithstanding this definition, items of expense under coverages such as dental care, vision care, prescription drug or hearing aid programs may be excluded from the definition of allowable expense. A plan that provides benefits only for any such items of expense may limit its definition of allowable expenses to like items of expense.
When a plan provides benefits in the form of service, the reasonable cash value, as determined by the insurer based on the value placed on that service in the geographic area, will be considered as both an allowable expense and a benefit paid.
The difference between the cost of a private hospital room and the cost of a semi-private hospital room is not considered an allowable expense under this definition unless the patient's stay in a private hospital room is medically necessary, as determined by the physicians of record.
When COB is restricted in its use to specific coverage in a contract (for example, major medical or dental), "allowable expense" must include the corresponding expenses or services to which COB applies.
When benefits are reduced under a primary plan because a covered person does not comply with the plan provisions, the amount of the reduction shall not be considered an allowable expense. Examples of these provisions are those related to second surgical opinions, precertification of admissions or services, and preferred provider arrangements.
Only benefit reductions based upon provisions similar in purpose to those described in this definition and contained in the primary plan may be excluded from allowable expenses.
This provision shall not be used by a second plan to refuse to pay benefits because an HMO member has elected to have health care services provided by a non-HMO provider, and the HMO, pursuant to its contract, is not obligated to pay for providing those services.
"Claim" means a request that benefits of a plan be provided or paid. The benefits claimed may be in the form of:
services (including supplies);
payment for all or a portion of the expenses incurred;
a combination of services and payment; or
an indemnification.
"Claim Determination Period" or "CDP" means the period of time, which must not be less than 12 consecutive months, over which allowable expenses are compared with total benefits payable in the absence of COB, to determine whether over insurance exists and how much a plan will pay or provide.
The CDP is usually a calendar year, but a plan may use some other period of time that fits the coverage of the contract. A person may be covered by a plan during a portion of a CDP if that person's coverage starts or ends during the CDP.
As each claim is submitted, each plan is to determine its liability and pay or provide benefits based upon allowable expenses incurred to that point in the CDP, but that determination is subject to adjustment as later allowable expenses are incurred in the same CDP.
"Code" means the Illinois Insurance Code [215 ILCS 5 ].
"Coordination of Benefits" or "COB" means a provision establishing an order in which plans pay their claims.
"Hospital Indemnity Benefits" means benefits not related to expenses incurred. The term does not include reimbursement-type benefits even if they are designed or administered to give the insured the right to elect indemnity-type benefits at the time of claim.
"Plan" means a form of coverage with which coordination is allowed. The definition of plan in the contract must state the types of coverage that will be considered in applying the COB provision of that contract. The right to include a type of coverage is limited by this definition.
The definition shown in the Model COB provision (see Exhibit A) is an example of what may be used. Any definition of plan in the contract that satisfies this definition may be used. (The Department will determine compliance with this definition under its authority in Section 143 of the Code.)
This Part uses the term "plan". However, a contract may, instead, use "program" or some other term.
Plan may include:
Individual and group insurance and group subscriber contracts;
Uninsured arrangements of individual, group or group-type coverage;
Individual and group or group-type coverage through HMOs and other prepayment, group practice and individual practice plans;
Group-type contracts. Group-type contracts 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 are used and regardless of how the group-type coverage is designated. Individually underwritten and issued guaranteed renewable policies would not be considered "group-type" even though purchased through payroll deduction at a premium savings to the insured since the insured would have the right to maintain or renew the policy independently of continued employment with the employer;
The amount by which individual, group or group-type hospital indemnity benefits exceed $100 per day;
The medical benefits coverage in individual or group automobile contracts, in group or individual automobile "no fault" contracts, and in traditional automobile "fault" type contracts, to the extent those contracts are primary plans; and
Medicare or other governmental benefits, except as provided in this definition. That part of the definition of plan may be limited to the hospital, medical and surgical benefits of the governmental program.
"Plan" shall not include:
Individual and group or group-type hospital indemnity benefits of $100 per day or less;
School accident-type coverages. These contracts cover elementary and secondary school students and college students for accidents only, including athletic injuries, either on a 24-hour basis or on a "to and from school" basis;
A state plan under Medicaid;
A law or plan when, by law, its benefits are in excess of those of any private insurance plan or other non-government plan;
Hospital indemnity coverage benefits or other fixed indemnity coverage;
Accident only coverage;
Specified disease or specified accident coverage;
Limited benefit health coverage;
School accident-type coverages that cover students for accidents only, including athletic injuries, either on a 24-hour basis or on a "to and from school" basis;
Benefits provided in long-term care insurance policies for nonmedical services, for example, personal care, adult day care, homemaker services, assistance with activities of daily living, respite care and custodial care, or for contracts that pay a fixed daily benefit without regard to expenses incurred or the receipt of services;
Medicare supplement policies;
A state plan under Medicaid;
A governmental plan that, by law, provides benefits that are in excess of those of any private insurance plan or other nongovernmental plan; or
Disability income protection coverage.
"Primary Plan" means a plan whose benefits for a person's health care coverage must be determined without taking the existence of any other plan into consideration. There may be more than one primary plan. A plan is a primary plan if either:
the plan has no order of benefit determination rules, or it has rules that differ from those permitted by this subchapter; or
all plans that cover the person use those order of benefit determination rules and, under those rules, the plan determines its benefits first.
"Secondary Plan" means a plan that is not a primary plan. If a person is covered by more than one secondary plan, the order of benefit determination of this Part decides the order in which that person's 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 that, under this Part, has its benefits determined before those of that secondary plan.
"This Plan", in a COB provision, refers to the part of the contract providing the health care benefits to which the COB provision applies and that may be reduced because of the benefits of other plans. Any other part of the contract providing health care benefits is separate from "this plan". A 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.
Ill. Admin. Code tit. 50, § 2009.20
Amended at 15 Ill. Reg. 15061, effective October 7, 1991