Playing Good, Clean Defense in 2021: A Look at Your Plan’s Coordination of Benefits Provisions

January 18, 2021

Kelly Norwood, vice president of Partnership Services, PartnerSource

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'Happy’ New Year? If you are an Alabama fan, it certainly is. While the Crimson Tide’s domination may frustrate those of us who are not rolling the tide, there is no denying the team’s process for winning involves a great defense. Those on any Texas injury benefit program team (Dallas Cowboys: I’m looking at you here, too), can utilize a great defense.

Let’s begin 2021 by studying your work-injury program’s legal and conceptual basis for “defending” the integrity of an occupational injury benefit plan while also protecting the viability and intent of federal benefit programs.

Be thorough, like Nick Saban. The head coach of Alabama is considered by many to be the greatest coach in college football history, and one reason is he is extremely thorough. When was the last time you read Article 7 of your PartnerSource injury benefit plan? This little golden nugget is as thorough and methodical as a Saban game plan. Article 7 provides a basis for a precise, orderly, fact-based coverage decision when multiple benefit plans or programs apply to a work-injury event. Look to this provision to determine which program takes the lead (the “primary plan”) and which is supplemental (the “secondary plan”).

Don’t ‘truck’ the referee. Injury plans have clear language to protect federal benefit programs, such as Social Security Disability and Medicare. For example, consistent with the Medicare Secondary Payer rules for no-fault and/or liability forms of coverage, your plan should state the medical benefits payable under the Texas Injury Plan are primary. This means that the medical benefits provided under the plan should never be reduced because of Medicare eligibility. Remember, these federal programs are like the referee, providing protection and fair play so that benefits are available to aging adults and the disabled. A plan lacking proper language to defend these federal programs is like a reckless linebacker that ‘trucks’ the referee while trying to make a play on the ball. You never, ever want to be that guy!

Remember: Stop the run. The first goal of any good defense is to stop the run. It’s easy to forget the basics (still looking at you, Dallas Cowboys). Section 7 is an often-overlooked provision that serves a very valuable function and legal basis for only paying what the plan owes, no more and no less. It’s also critical in preventing duplicate payments.

Recognize the MVP. Section 7 wraps up with the Plan’s right to subrogate and pursue recovery from other applicable plans, programs, settlements or awards. When written properly, subrogation language provides the plan with FIRST lien recovery of any “benefits paid or to be paid” with the lien “not to be reduced by attorney’s fees or expenses.” Your document should provide the plan with legal recourse and authority to assign counsel to pursue other negligently responsible third parties in order to protect and recover the plan’s lien. And remember, under the right circumstances, the employer’s release of its subrogation right under the benefit plan can be appropriate consideration when settling an employee’s claim of negligence liability against the employer. A very strong defense indeed!

Next month, we will discuss what it means to have a great offense in pursuing the best possible outcomes for your injury benefit program and benefit plan participants. What does a proactive offense look like in work injury program administration? HINT: It involves communication!

For now, remember that only with a strong defense can we truly have a great team (come on, Dallas Cowboys). Contact a PartnerSource team leader to learn more about the benefits of Article 7.