(1) Subsection (4) of this rule contains a model COB provision. Except as provided in subsection (4) (b) and (4) (c) of this rule and in ARM 6.6.2405, the model COB provision may be used in a group contract.

(2) The COB provision in a group contract does not have to use the words and format shown in subsection (4) of this rule. The language of the COB provision may be changed to fit the language and style of the rest of the group contract or to reflect the difference among plans that:

(a) provide services;

(b) pay benefits for expenses incurred; and

(c) indemnify.

(3) A contract may not provide that its benefits are excess oral ways secondary to any plan defined in subsection (1) of ARM 6.6.2403, except in accordance with these rules. A group contract may not reduce benefits on the bases that:

(a) another plan exists;

(b) except with respect to part B of medicare, a person is or could have been covered under another plan; or

(c) a person has elected an option under another plan providing a lower level of benefits than another option which could have been elected.

(4) If a plan covering a risk resident or to be performed in this state includes a COB provision, the COB provision must be consistent with the following model COB provision.

(a) (i) This COB provision applies to this plan when an employee or the employee's covered dependent has health care coverage under more than one plan.

(ii) If this COB provision applies, look first at the order of benefit determination rules set forth in subsection (4) (c) of this rule. Those rules determine whether the benefits of this plan are determined before or after those of another plan.   The benefits of this plan:

(A) may not be reduced if, under the order of benefit determination rules, this plan determines its benefits before another plan; but

(B) maybe reduced if, under the order of benefit determination rules, another plan determines its benefits first.

(b) Each insurance policy with a COB provision must define the following terms in the manner they are defined in ARM 6.6.2403:   plan, this plan, primary plan, secondary plan, allowable expense, and claim determination period.

(c) The order of benefit determination rules are as follows:

(i) When there is a basis for a claim under this plan and another plan, this plan is a secondary plan that has its benefits determined after those of the other plan, unless:

(A) the other plan has rules coordinating its benefits with those of this plan; and

(B) both those rules and this plan's rules, in subparagraph (ii) below, require that this plan's benefits be determined before those of the other plan.

(ii) This plan determines its order using the first of the following rules that applies:

(A) The benefits of the plan that covers the person as an employee, member, or subscriber (that is, other than as a dependent)are determined before those of the plan that covers the person as a dependent.

(B) Except as otherwise provided in these rules, if this

plan and another plan cover the same child as a dependent of

different persons, not separated or divorced, called "parents":

(I) the benefits of the plan of the parent whose birthday falls earlier in a year are determined before those of the plan of the parent whose birthday falls later in that year; but

(II) if both parents have the same birthday, the benefits of the plan that covered the parent longer are determined before those of the plan that covered the other parent for a shorter period of time.

(C) If two or more plans cover a person as a dependent

child of divorced or separated parents, benefits for the child

are determined in this order:

(I) first, the plan of the parent with custody of the child;

(II) then, the plan of the spouse of the parent with the custody of the child; and

(III) finally, the plan of the parent not having custody of the child.

     However, if the specific terms of a court decree state that one of the parents is responsible for the health care expenses of the child and the entity obligated to pay or provide the benefits of the plan of that parent has actual knowledge of those terms, the benefits of that plan are determined first. This subsection does not apply with respect

to any claim determination period or plan year during which any benefits are actually paid or provided before the entity has that actual knowledge.

(D) The benefits of a plan that covers a person as an employee who is neither laid off nor retired (or as that

employee's dependent) are determined before those of a plan

that covers a person as a laid off or retired employee (or as

that employee's dependent) .If the other plan does not have this rule, and if, as a result, the plans do not agree on the

order of benefits, this subsection does not apply.

(E) If none of the above rules determines the order of

benefits, the benefits of the plan that covered an employee,

member, or subscriber longer are determined before those of the plan that covered the person for the shorter time.

(d) (i) This subsection (d) applies when, in accordance with subsection (c) , this plan is a secondary plan as to one or more other plans. If this subsection applies, the benefits of this plan maybe reduced under this section. Other plans are

referred to as "the other plans" in subsection (d) (ii) immediately below.

(ii) The benefits of this plan are reduced when the

allowable expenses in a claim determination period is less than or equal to the sum of:

(A) the benefits that would be payable for the allowable expenses under this plan in the absence of this COB provision; and

(B) the benefits that would be payable for the allowable expenses under the other plans, in the absence of provisions with a purpose like that of this COB provision, whether or not claim is made. In that case, the benefits of this plan are reduced so that they and the benefits payable under the other plans do not total more than those allowable expenses.

If the benefits of this plan are reduced as described above, each benefit is reduced in proportion and charged against any applicable benefit limit of this plan.

(e) Certain facts are needed to apply these COB rules. [The XYZ Company] has the right to decide which facts it needs. It may obtain needed facts from or provide them to any other organization or person. [The XYZ Company] need not tell, or get the consent of, any person to obtain or provide needed facts. Each person claiming benefits under this plan must provide [The XYZ Company] any facts it needs to pay the claim.

(f) A payment made under another plan may include an amount that should have been paid under this plan. If it does, [The XYZ Company] may pay that amount to the organization that paid it. That amount will then be treated as though it were a benefit paid under this plan. [The XYZ Company] will not have to pay that amount again. The term "payment made" includes the provision of benefits in the form of services, in which case "payment made" means reasonable cash value of the benefits provided in the form of services.

(g) The amount of the payments made includes the reasonable cash value of any benefits provided in the form of services. If the amount of the payments made by [The XYZ Company] is more than it should have paid under this COB provision, it may recover the excess from one or more of:

(i) the persons it has paid or for whom it has paid;

(ii) insurers; or

(iii) other organizations.