## Facts

- Blue Cross issued and administered a group health policy for Moss Point Marine employees; Kenneth Larson was covered, and his wife Carolyn Larson was covered as his dependent.
- Carolyn was also a participant in a separate employer-sponsored, self-funded Employee Medical Expense Reimbursement Trust established by Pascagoula-Moss Point Bank.
- The Blue Cross policy included a coordination-of-benefits (COB) provision intended to limit combined payments from multiple plans to no more than 100% of the reasonable cost of services.
- The Trust included an “other insurance” provision stating it would not pay if the claim was covered under any other employer-sponsored insurance plan, including coverage attributable to a spouse’s employment.
- Carolyn incurred medical expenses exceeding $600 and submitted a claim to Blue Cross.
- Blue Cross treated the Trust as primary, paid less than $200 as an alleged “excess” amount, and denied full payment.
- The Trust, relying on its other-insurance clause, denied primary responsibility because Carolyn’s expenses were covered under the Blue Cross policy.
- The county court, on stipulated facts, declared Blue Cross primarily liable and the Trust liable only for contingent excess liability; the circuit court affirmed.

## Issues

1. When a group health policy contains a COB clause and a separate employer reimbursement trust contains an other-insurance clause, which coverage is primary for the insured’s medical expenses?
2. Whether Blue Cross’s COB provision converted its otherwise-applicable coverage into secondary coverage when the Trust attempted to disclaim payment if other employer-sponsored coverage existed.

## Decision

- The Mississippi Supreme Court affirmed.
- Blue Cross was primarily liable for Carolyn Larson’s covered medical expenses.
- The Trust’s obligation was contingent and excess (secondary) under its own other-insurance provision.
- Blue Cross’s COB clause functioned to prevent total payments exceeding 100% of expenses, not to avoid primary liability where its policy otherwise covered the claim.

## Legal Principles

- Insurance and plan provisions are construed according to their plain meaning, and courts prefer a reading that gives effect to each provision rather than rendering language meaningless.
- A standard COB clause that limits aggregate recovery to actual medical expenses generally coordinates payment amounts but does not, standing alone, make the insurer secondary.
- An other-insurance clause that conditions payment on the absence of other employer-sponsored coverage reflects an intent for the plan to operate only as residual or excess coverage.
- When competing provisions can be harmonized, courts may assign primary liability to the coverage that promises ordinary benefits and treat the expressly contingent plan as excess.

## Conclusion

The court held that Blue Cross remained the primary payor under its group policy despite its COB clause, while the self-funded employer trust, by expressly disclaiming payment when other employer-sponsored coverage existed, provided only contingent excess coverage.


Blue Cross & Blue Shield of Miss., Inc. v. Larson, 485 So. 2d 1071 (Miss. 1986)