Why coordination of benefits

How to do coordination of benefits better. COB Smart enables health plans to identify which of their members have other coverage more easily, so that benefits can be coordinated, and claims can be processed and paid by the appropriate health plan. Learn more. Latest Newsletter. Coordination of Benefits, Explained. March COB creates a framework for the two insurance companies to coordinate benefits so they pay their fair share when both plans pay.

COB decides which is the primary insurance plan and which one is secondary insurance. You can think of the secondary payer as supplemental coverage to help you pay for out-of-pocket costs. The primary insurance pays first its share of the health care costs.

COB rules depend on the size and type of the plan. Your state can also dictate the rules. Plus, large employers may have their own COB rules for medical claims. Typically, Medicaid is always considered a secondary payer. Medicare is either primary or secondary, depending on the circumstances. For instance, Medicare is the primary payer if the other insurer is a small business, but it's secondary when the other payer is a large company.

If you and your spouse have employer health plans, your employer is generally the primary payer for you and your spouse's plan is secondary. For workers' compensation, the worker's comp pays first and your health insurance plan would be considered secondary. Check out the table below on the page for more instances, including how private insurers coordinate for children's health coverage, COBRA and Veterans Administration.

That sounds great, right? Well, having two health plans also means that you'll likely need to pay two premiums and deal with deductibles for two health plans. Let's review COB, when they are needed, whether you should get dual coverage, what to do if you have issues with COB and some tips from experts. There are various situations when two health insurers need to coordinate on medical claims. You and your spouse may be eligible for two different policies from your jobs. Your spouse might be on Medicare and you have your own health plan.

You might be under 26 and have your employer's coverage and a parent's insurance. Here is a list of situations and which plan would likely serve as primary insurer and which ones would probably be secondary:. It is common for family members to be covered by more than one health care plan. This happens, for example, when a husband and wife both work and choose to have family coverage through both employers.

The goal is to make sure that the combined payments of all plans do not add up to more than your covered health care expenses. Coordination of benefits COB is complicated, and covers a wide variety of circumstances. This is only an outline of some of the most common ones. If your situation is not described, read your evidence of coverage or contact your state insurance department.

You will be asked to identify all the plans that cover members of your family. The primary plan always pays first when you have a claim. If you or a family member are covered under another plan in addition to this one, we will be primary when:.

The claim is for your own health care expenses, unless you are covered by Medicare and both you and your spouse are retired. When we are the primary plan, we will pay the benefits in accordance with the terms of your contract, just as if you had no other health care coverage under any other plan.

When we are the secondary plan, we do not pay until after the primary plan has paid its benefits. We will then pay part or all of the allowable expenses left unpaid, as explained below. If there is a difference between the amount the plans allow, we will base our payment on the higher amount. However, if the primary plan has a contract with the provider, our combined payments will not be more than the amount called for in our contract or the amount called for in the contract of the primary plan, whichever is higher.

Health maintenance organizations HMOs and preferred provider organizations PPOs usually have contracts with their providers. We will determine our payment by subtracting the amount the primary plan paid from the amount we would have paid if we had been primary.