Coordination of Benefits (COB) is a feature of health plans that determines which plan pays first when individuals are covered by more than one plan. For example, spouses who each receive coverage from an employer might choose to enroll dependent children in both plans.
How Coordination of Benefits Works:
When you have coverage under two health insurance plans, the coordination process follows these steps:
Primary Plan Pays First: The primary plan pays your claims as if there were no other insurance.
Secondary Plan Fills Gaps: Your secondary plan may pay additional benefits for what your primary plan did not cover.
For example, if your doctor's visit costs $80 and your primary health plan pays $50, your secondary plan might cover the remaining $30.
Determining Which Plan is Primary:
COB rules establish which plan pays first and which pays second. Here's one example of how primary coverage is often determined:
For You: Your own employer's plan is primary for you
For Your Spouse: Your spouse's employer's plan is primary for them
For Children: The "Birthday Rule" typically determines which parent's plan is primary (explained below)
Additional rules that may apply:
A plan without a COB provision is generally considered primary
When both plans have COB rules, the plan in which you're enrolled as an employee or main policyholder is primary
If you have COBRA coverage and other employer-sponsored coverage, the employer-sponsored plan is primary and COBRA is secondary
If no other provisions determine which plan is primary, the plan covering you the longest is typically considered primary
Sometimes, a non-health plan, such as auto accident insurance or workers' compensation, might cover the cost of some medical services. In that case, the non-health plan is usually considered the primary coverage. However, in most cases, the health plan will pay for the medical services first and then seek reimbursement from the non-health insurance through a process called subrogation.
The Birthday Rule for Children:
For children covered under both parents' plans, the "Birthday Rule" determines which plan is primary. Under this rule, the plan of the parent whose birthday (month and day only, not year) falls earlier in the calendar year is primary. If both parents have the same birthday, the plan that has covered either parent longer is primary.
Different rules may apply for children of divorced or separated parents, depending on custody arrangements and court orders.