Coordination of Benefits
If you or a covered family member have more than one group health insurance plan (known as “double coverage”), coordination of benefits (COB) rules determine which plan pays first. The “primary” plan will process your claims first. The “secondary” plan will consider your claim after the primary plan and may pay benefits toward any remaining charges.
To determine which plan is primary, SAMBA applies the guidelines from the National Association of Insurance Commissioners (NAIC). (Note: for Medicare Plans, we apply current guidelines from Medicare.)
The most common rules for determining the COB order of payment are the Non-Dependent/ Dependent Rule, the Active/Inactive Rule and the Birthday Rule.
- Non-dependent/Dependent Rule: The plan that covers an individual as an enrollee or subscriber is the primary payer over a plan that covers that individual as a dependent (example, as a spouse).
- Active/Inactive Rule: The plan that covers an individual as an active employee or as a covered dependent of an active employee is the primary payer over the plan that covers that individual as a retired employee or as the dependent of a retired employee.
- Birthday Rule: This rule determines whether a plan is primary or secondary for an eligible dependent child who is covered by both parents’ benefit plans and those parents live together. The plan of the parent whose birthday (month and day only) is earlier in a calendar year would provide primary coverage for the child. If both parents have the same birthday, then the plan that has been in effect the longest is primary.
If the parents of a covered dependent child are divorced or separated or are not living together (whether or not they have ever been married), then different rules apply:
a) If a court decree states that one of the parents is responsible for the child’s health care expenses or coverage and the plan covering that parent has actual knowledge of those terms, that plan would be primary. If the responsible parent has no health insurance coverage for the child, but that parent’s spouse does, that parent’s spouse’s plan is the primary plan.
b) If a court decree states that both parents are responsible for the child’s health care expenses or coverage, the Birthday Rule would determine the order of benefits;
c) If a court decree states that the parents have joint custody without specifying that one parent has health insurance coverage responsibility, the Birthday Rule would determine the order of benefits; or
d) If there is no court decree assigning health insurance responsibility for the child, the order of benefits for that child would be as follows:
- The plan covering the custodial parent;
2. The plan covering the custodial parent’s spouse;
3. The plan covering the non-custodial parent; and then
4. The plan covering the non-custodial parent’s spouse.
For additional information on NAIC rules regarding the coordinating of benefits, visit the NAIC website.
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