Coordination of Benefits (COB) rules govern how health insurance plans interact when
an individual is covered by more than one policy. Understanding these rules can help you make the most of your coverage and maximize savings on medical bills.
How Coordination of Benefits Policies Help in Health Insurance Plans.
Coordination of Benefits policies can help you save on health care costs by ensuring that the appropriate coverage is applied towards a medical bill. It also can maximize claims payments and help prevent a situation in which an individual’s medical bill is paid for by too many insurance plans, risking a denial of payment. Understanding these rules can help you make sure you are taking full advantage of the benefits available to you.
Understanding the Difference Between Primary Payor and Secondary Payor.
When two or more health insurance policies are in place for a patient, one of them will
be designated as the primary payor and the other(s) as the secondary payor. The
primary payor will be responsible for paying the claim first, with the remaining balances
making up the responsibility of secondary payor. Additionally, primary payors will
usually determine and disclose their coordination of benefits rules before making
payment. Knowing these rules can help you maximize your claims payments and save
money on medical bills.
What is a Health Insurance ‘Order of Benefit Determination’?
A Health Insurance ‘Order of Benefit Determination’ (or « OBD ») is a rule used to decide
which payor will be the primary or secondary when two or more policies are in place.
The OBD may be based on a variety of factors, including the age of the insured person,
who has the plan with earlier effective date and any other special rules that apply.
Generally speaking, the insurance policy for the spouse with an employer-sponsored
plan will be designated as primary payor. If both spouses have employer-sponsored
plans, the respective plans will look at their coordination of benefits rules and OBDs to
determine which one will prevail as primary payor.
What are the Rules For Filing a Claim and Collecting Benefits?
Health Insurance Coordination of Benefits Rules : When filing a claim for benefits, you must provide all necessary information from each of the health plans involved in the Coordination of Benefits. This includes insurance
documents, policy numbers, and completing any forms requested. Depending on the
rule used for OBD, either the primary insurer will pay up to 100% of its coverage limits
or one insurer pays first before the other will pay its portion (in this case, the secondary
insurer will generally ‘coordinate’ benefits with agreed upon limitations). It is also
important to note that some insurers have coordination of benefit rules which may
require both parties to pay their portion even if only one person incurred the medical
expenses.
Know Specifics on Receiving Benefits When You Have Multiple Coverage Plans.
When you have multiple insurance plans, the claims are filed in a specific order
according to OBD rules. Generally, the plan with the highest priority will pay first. After
that, any remaining balance may be paid by the secondary health plan or even a tertiary health plan if applicable. Make sure to read your policy documents and understand the coverage limits of each insurer in order to maximize your benefits and reduce out-of-pocket expenses.