New Bulletin on Coordination of Benefits for Medical Claims Associated with Motor Vehicle Accidents

On Nov. 22, 2017, the Massachusetts (MA) Division of Insurance published Bulletin 2017-06. As background, the Division recently adopted changes to MA coordination of benefits (COB) rules for medical claims associated with motor vehicle accidents. The bulletin is meant to provide clarity on how those COB rules work for claims between fully insured health policies and the personal injury protection (PIP) and medical payment benefits of motor vehicle liability policies.

PIP is a compulsory coverage that’s included in all MA motor vehicle liability insurance policies and can pay up to $8,000 for a claimant’s medical expenses, replacement services, lost wages and funeral expenses. Medical payment benefits, which are optional, can be offered as part of a motor vehicle liability insurance policy and can pay for reasonable medical and funeral expenses incurred as a result of a motor vehicle accident.

According to the bulletin, the first $2,000 in medical and funeral expenses incurred as a result of a motor vehicle accident must be submitted to the automobile insurer to be paid under PIP. The remaining amount in PIP coverage is coordinated between the claimant’s group health and motor vehicle insurance plans. Once the first $2,000 has been exhausted, any medical-related claims must be submitted to the health insurance carrier for coverage determination, if health coverage exists. The health insurance carrier cannot deny payment for medical expenses on the basis of PIP coverage availability. In addition, if there are medical payment benefits within the motor vehicle policy, the medical payment benefits are always secondary to and in excess of the benefits of the health coverage and the PIP benefit (up to the limits of the medical payment benefits).

The bulletin also describes certain COB situations, depending on the exact type of coverage available to the claimant. Those include where the claimant doesn’t have health coverage or medical benefit payment coverage, where the claimant has health coverage but not medical payment coverage, where the claimant has medical benefit payment coverage but does not have health coverage, and where the claimant has health coverage and medical payment coverage. Importantly, fully insured health benefit plans may not include a COB provision in their contracts, making their coverage secondary to other coverage for health care services, including medical payment coverage. Automobile insurers may continue to determine whether PIP or medical payment coverage pays first (based on the reason for the health insurance carrier’s denial or based upon an exclusion (such as felonious conduct) or under the terms of the automobile insurance policy.

The new bulletin (and the associated MA COB rules) don’t apply to certain types of plans, including hospital/fixed indemnity coverage, accident-only coverage, specified disease/illness coverage, Medicare supplemental policies, school accident-type coverage (such as athletic injury coverage), long-term care and other non-medical policies, and state plans under Medicaid. In addition, self-insured plans are generally exempt from state laws such as the MA COB rules (although a self-insured plan administrator could adopt the rules to help with ease of administration).

Although the bulletin contains no new employer obligations, employers should be aware of the new COB rules with respect to motor vehicle accident coverage and fully insured group health plans in MA (particularly if employees have questions regarding coverage after a motor vehicle accident that involves medical care). The bulletin and COB rules are effective Jan. 1, 2018.

Bulletin 2017-06 »