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Coordination of Benefits-Birthday vs. Gender


Guest Ruth

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Under dual coverage for a newborn baby, the mother's employer has a fully insured health plan that automatically covers newborns for 31 days. The father, who works for a self-insured employer, enrolled the baby under his plan as of the date of birth. The mother's insurance paid the claim for the first month. The baby was a premature birth and the amount paid was about $267,000. 1 1/2 years later the mother's insurer is coming back claiming that their policy is going by the gender rule and the father's insurance must reimburse them for the paid claim. The father's insurance goes by the birthday rule and since the mother is born first, refuses to reimburse.

Any suggestions as to how this might go? Is there a time limitiation to the insurer questioning a claim they paid? How would the self insured's reinsurer react? We are in PA and the insurance department states that the birthday rule seems to be most often used but that there was no definite rule or regulation by the state.

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[i am not an attorney - this is my lay opinion.]

I assume the plan documents themselves have no specific language to deal with this combination.

Under those circumstances, itis my understanding the ERISA rules would apply and the birthday rule is the one which has stood up in court.

here are three cases which support that outcome:

Prudential Ins. Co. of Am. v Evergreen Oak Elec. Supply & Sales Co. (1996, ND Ill) 1996 US Dist

PM Group Life Ins. Co. v Western Growers Assur. Trust (1992, CA9) 953 F2d 543

Reinforcing Iron Workers Local 426 Health & Welfare Fund v Michigan Bell Tel. Co. (1990, ED Mich) 746 F Supp 668.

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The one plan states that they consider their gender rule to outrule the birthday one. The plan with the birthday rule states that they will overrule the gender one.

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ERISA doesn't provide a COB rule, so courts have had to supply one in the case of a conflict between plans.

The PM Group case cited by Larry M appears to be directly on point. Unfortunately, it is from the 9th Circuit and is not binding in PA. The decision states that 42 states use the birthday rule (citing information from 1991--fairly old now).

I'd put pressure on the plan using the gender rule to justify its position as secondary payor to provide some legal support for that position.

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