Coordination of Benefits (COB) is the method of dividing responsibility for payment among the health plans that cover an individual so that the total of all reasonable expenses for covered services will be paid. You must inform the Health Plan about the existence of other health coverage so that the benefits payable may be properly coordinated.
The Health Plan coordinates benefits with all other group and private health plans. It also coordinates benefits for married couples who are both eligible participants in the Plan and for dependent children of two eligible married participants. If a parent and a child are both participants, the Plan will coordinate with respect to the child's coverage. However, since under the Plan rules the parent cannot be a qualified dependent of the child, the parent will only be treated as a participant with one coverage.
If you qualify for coverage with the SAG – Producers Health Plan and another health plan, it is very important for you to understand the impact of choosing whether or not to pay the premium for that plan or for the SAG – Producers Health Plan. COB rules can be very challenging to understand. Therefore, we strongly recommend you contact the Plan Office to discuss your individual situation when deciding whether or not to pay a premium for coverage. You should also contact the office of your other plan as they may have their own special rules regarding COB.
The primary plan is the plan that pays first on the claim. If a balance is still due after the primary plan's payment, the claim should be sent to the secondary plan for consideration.
In determining which of the plans is primary or secondary, this Health Plan will apply the rules outlined below. The first rule that applies to the situation will be used.
Determination of Dependent Child's Primary Plan
In the case of a dependent child where the parents are not divorced, this Plan uses the "birthday rule". This means the plan of the parent whose birthday occurs earlier in the calendar year is primary. If both parents have the same birthday, the plan that has covered the child for the longer period is primary. If the other plan does not have the birthday rule, the other plan's rules will determine who is primary.
In the case of a dependent child where the parents are divorced, the rules are:
Coordination of Benefits with Other Entertainment Industry Health Plans (EICOB)
Note: The Plan's EICOB rules can be very challenging to understand. We strongly suggest you contact the Plan Office to discuss your individual situation.
If you are entitled to primary coverage with another entertainment industry plan, but fail to pay the premium in that plan, the SAG – Producers Plan will maintain its secondary position. The Plan refers to this as EICOB and the rule serves to maintain the correct primary/secondary positions of the health plans based on your longest continuous coverage. The other entertainment industry plans include the AFTRA Health Plan, the Directors Guild of America – Producer Health Plan, the Equity – League Health Plan, the Motion Picture Industry Health Plan and the Writers' Guild – Industry Health Fund. These rules apply to participants and dependents in both Plan I and Plan II, regardless of whether your eligibility is Earned or Senior Performers.
In order to maintain its secondary position, the Plan will pay up to 20% of the Allowed Amount for your hospital and medical claims, subject to the deductibles. The Plan will also pay 20% of the Allowed Amount for Plan I mental health and substance abuse claims, subject to the deductibles. For prescription drug benefits, you will not receive an Express Scripts ID card. You must pay for your prescriptions at the pharmacy and submit a claim to the Plan Office for reimbursement of up to 20% of the Allowed Amount, subject to the non-network medical deductible. Dental and vision benefits will continue to be administered through Delta Dental and Vision Service Plan as if the SAG – Producers Plan is primary.
Same Longest Continuous Coverage Date – When the longest continuous coverage date, as described on page 76, is the same under the SAG – Producers Health Plan and your other plan, you are referred to as a "pro rata" participant. This means that you will be able to choose the plan you wish to be primary. Only participants in this situation are given a choice between plans. If you think you may be a pro rata participant please contact the Plan Office.
Primary Plan is Individual Only – If your primary plan provides only individual coverage and excludes coverage for your dependents, the SAG – Producers Health Plan will continue to pay primary for your dependents. For example, the Individual Plan at AFTRA provides no dependent coverage, so dependents of participants in that plan would continue to be covered as primary in the SAG – Producers Health Plan, regardless of whether you continued your AFTRA coverage. However, the AFTRA Family Plan does provide for dependent coverage by paying a premium.
Accordingly, you will be required to keep your AFTRA Family Plan dependent coverage in force to avoid a reduction in coverage with the SAG – Producers Health Plan.
Deferral of Equity – League Health Plan Eligibility – The Equity – League Health Plan has a rule that gives its participants the choice to defer their health coverage in order to gain a longer period of coverage. If your other primary plan is the Equity – League Health Plan and you elect to defer your Equity eligibility in accordance with their plan rules, the SAG – Producers Health Plan will not apply its special EICOB rule. This means the SAG – Producers Health Plan will pay as primary for those participants. However, if you drop your Equity coverage for any reason other than the special deferral rule, such as for non-payment of premiums, this Health Plan will reduce its benefits accordingly.
SAG – Producers Health Plan Original Position is Third or Lower – If the SAG – Producers Health Plan's original position is third or lower the reduction does not apply. So, if you have DGA as primary, AFTRA as secondary and SAG as third, but you fail to pay your AFTRA premium, SAG will pay as if it were in second position. Your benefits will not be reduced because of your failure to pay the AFTRA premium.
If Medicare is your primary plan, however, this exception changes so that the reduction does not apply if the SAG – Producers Health Plan's original position is fourth or lower. For example, suppose Medicare is primary, AFTRA is second and SAG is third. If you fail to pay the AFTRA premium, SAG will only pay what it would have paid in the third position.
Married Participants Both Eligible for SAG – Producers Health Coverage – A special rule applies to married participants who are both eligible for the SAG– Producers Health Plan and who also have coverage in another entertainment industry plan. If the SAG – Producers Health Plan is primary for one or both of the participants, the SAG – Producers Health Plan will not penalize the family for failure to pay all three premiums. You may choose to pay for only one SAG coverage, in which you and your family will receive primary coverage. If you pay the premiums for both SAG coverages, you and your family will receive full coverage (100%), subject to the Plan's Allowances.
Parent and Dependent Child Both Eligible for SAG – Producers Health Coverage – The special rule just described also applies to families where a parent and dependent child are both eligible for the SAG – Producers Health Plan.
Coordination of Benefits with HMOs
If you or your dependent have primary coverage with an HMO, including a Medicare HMO, you must use your HMO provider network. When you do, the SAG – Producers Health Plan will pay secondary for any copays or deductibles you may incur. If you do not use the HMO network providers, the Health Plan will reduce benefits by 80%. In other words, the maximum the Plan will pay is 20% of the Allowed Amount on the claim.
This rule applies to HMO coverage you or your dependents may have through Medicare, another employer or privately. It is extremely important that you use your HMO when it is your primary plan. If you do not, your benefits under this Health Plan are reduced and you will have much larger out-of-pocket expenses.
In cases where your HMO excludes specific services for which this Plan has a benefit, such as chiropractic care, regular Health Plan benefits will be paid.
Once a determination has been made about which plan is primary, the benefits are processed as follows:
When This Health Plan is Primary
If this Health Plan is primary, the bills should be submitted to the Plan first (see page 84, "Filing a Claim for Benefits"). This Plan will pay benefits based on its rules as if there were no other coverage.
When This Health Plan is Secondary
If this Plan is secondary, copies of the original bills and a copy of the other plan's EOB should be submitted to the Plan Office. This Plan will determine how much it would have paid had there been no other coverage. It will then subtract what was paid by the primary plan from the total Allowed Amount.
The Allowed Amount is based on whether or not the provider is a network provider.
The difference between the Allowed Amount and what the primary plan paid will be paid by this Health Plan, provided it does not exceed the amount this Plan would have paid as primary. When a BlueCard PPO provider is involved, if the primary plan has already reimbursed more than the network contracted rate, this Plan will not make any payment and the remaining charges become a network write-off. You are not responsible for the balance.
Here are examples. Both examples assume that the participant is in Plan I, is not using a network provider and that the deductibles have been met.
|This Plan||The Primary Plan||Allowed Amount|
|Network||Network||The lower of this Plan's network contracted rate or the primary plan's network contracted rate.|
|Network||Non-Network||This Plan's network contracted rate.|
|Non-Network||Network||The primary plan's network contracted rate.|
|Non-Network||Non-Network||The higher of this Plan's allowance or the primary plan's allowance.|
|If This Plan Is Primary||If This Plan Is Secondary|
| $ 600 Allowed Amount
x 70% Plan's benefit
$ 420 This Plan's payment
| $ 600 Allowed Amount
– 420 Primary plan's payment
$ 180 This Plan's payment