Coordination of Benefits (COB) is a provision included in both member and physician and provider contracts. When two or more health plans cover a member, COB protects against double or over-payment. When we process a claim, we coordinate benefits if the member has other primary coverage from another carrier, our health plan, service plan, or government third-party payer. We’ll coordinate the benefits of the members plan with those of other plans to make certain that the total payments from all plans aren’t more than the total allowable expenses.
We abide by the following COB standards to determine which insurance plan pays first (primary carrier) and which pays second (secondary carrier). Briefly, these rules are as follows:
A member is primary on the plan in which he/she is the subscriber versus the plan in which he/she is a dependent. When a member is the subscriber on more than one plan, when both plans have a COB provision, the plan with the earliest start date pays first (primary).
When a dependent is double-covered under married parents’ health plans, the primary plan is the coverage of the parent with his/her birthday earlier in the year, regardless of their actual age. This standard is called the “Birthday Rule.”
When dependent children are double-covered by divorced parents, coverage depends on any court decrees. Generally, if the court decrees financial responsibility for the child’s healthcare to one parent, that parent’s health plan always pays first. If there are no court decrees, the plan of the parent with custody is primary.
Some group contracts are not subject to state regulations may have unique COB rules that could change the order of liability.