A Healthy Vision

About once a year you may get a letter in the mail from your health insurer asking about other insurance you may have.  Why do health plans do this?

They want to know if you have other insurance because it helps to determine which insurance policy should pay a claim first. 

It’s called Coordination of Benefits (COB), and it applies to people covered by more than one health care plan. COB helps ensure that covered individuals receive the benefits they are entitled to while avoiding overpayment by either plan.

How does COB work?

When an individual is covered by more than one health plan (e.g., insured under both their employer’s health plan and their spouse’s health plan), one plan is considered to be the primary carrier.  The other plan is considered to be the secondary carrier.

The primary carrier covers the major portion of a claim according to plan allowances, while the secondary carrier covers any remaining allowable expenses. Benefits are coordinated among both health plans to ensure that payments do not exceed 100% of charges for the covered services.

What determines primary and secondary coverage?

The following rules apply when determining which health plan will be the primary payer:

• Any plan without a COB provision always pays first.

• If the person receiving benefits is the subscriber under the contract, that health plan will be primary. The spouse’s health plan will become secondary.

The “Birthday Rule”

If a dependent child is covered by two or more plans, the plan of the parent whose birthday occurs earlier in the calendar year will be considered the primary carrier. This is known as the birthday rule.

• If both parents have the same birthday, the policy that has been in effect longer will be primary. The birthday rule is superseded when a court order or custody rule.

• If the dependent is a child of divorced or separated parents, Independent Health will need court documents that outline medical responsibility in order to process claims accurately.

• In a joint custody situation of a child, the birthday rule applies. If the divorce decree places responsibility on one parent, that parent’s health plan is primary. Otherwise, the custodial parent’s plan is primary and the other parent’s health plan becomes secondary.

Other COB considerations

Often, some or all of the costs of medical care are the responsibility of an insurance party other than one’s health insurance plan, such as in the event of a workers’ compensation situation or auto accident.

If Workers’ Compensation denies all or part of a claim, the health plan will review the claim to determine whether to pay benefits as the secondary carrier. Individuals injured at work must report their work-related injury in writing to their employer within 30 days of the accident.

No-Fault Auto Insurance covers all expenses relating to a person’s injuries resulting from an automobile accident. Individuals must file this type of claim with the applicable No Fault Carrier within 30 days of the accident.

Examples of injuries that should be reported to the No-Fault carrier include:

• Passenger in vehicle involved in an accident where injuries result;

• Injuring your hand in the car door;

• Bumping your head on the steering wheel;

• Accidently injuring a pedestrian or bicyclist with your automobile;

• When a medical event (e.g., heart attack, seizure or stroke) occurs while operating a motor vehicle that results in an accident.

A previous version of this article was published on Healthy Vision in 2018.