Jessica Fox Last Updated On: June 27, 2023

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How to Save on Health Insurance with Coordination Of Benefits?

coordination of benefits

If you haven’t heard of the health insurance term called coordination of benefits (COB), it’s time you familiarize yourself with it because COB has the potential to save you from paying a lot in out-of-pocket medical bills.

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What Is The Coordination Of Benefits?

The coordination of benefits refers to having more than one health insurance plan per household — i.e., you and your spouse both have health insurance coverage. If both you and your spouse are lucky enough to have healthcare benefits, you can keep both plans and use them as primary and secondary coverage. With the coordination of benefits, both health insurance plans can work synergistically to offer you 100% medical coverage — how’s that for teamwork?

It should be noted that COB is not a law; rather, it’s an industry-standard developed by the National Association of Insurance Commissioners (NAIC) for insurance companies.

How COB Works?

If you’re going to the doctor for a covered expense, your primary plan will cover up to its limit, and then your spouse’s secondary coverage will kick in to pay the remaining balance. Let’s say you’re going to the doctor, and the cost is $100, the primary plan will pay its fair share of $70, and then the secondary plan will pay the $30 balance.  

When it comes to determining primary and secondary coverage, the primary plan is the health insurance provided by your workplace, while the secondary plan would be your spouses. As for children, their primary health insurance is determined by the spouse who has their birthday first — or the birthday rule. E.g., A January birthday comes before a February birthdate, so dependent children’s primary coverage would come from the parent with a January birthday.

The Nuts And Bolts Of The Coordination Of Benefits

The coordination of benefits is all about effectively combining both coverages, so you get the health care you’re entitled to while ensuring both insurance providers pay their fair share. When you use your benefits, your primary plan will automatically pay its prescribed amount. If there is a balance owing, the secondary health insurance will pay close attention to the service provided and payout up to their limit.

Some things to keep in mind are: 

  • Payouts won’t exceed 100% (no plan will)
  • There are rules preventing duplication of benefits
  • It’s important to declare main and secondary plans
  • COB rules are set by large employers or the state

Situations When You'll Have to Pay

Not every medical service available to you is covered by health insurance. These are some situations when you may find yourself on the hook for a medical bill:
  • Reasonable And Customary: If you utilize a healthcare service or treatment that’s more expensive than what’s considered reasonable and customary, your benefits may not cover or only partially reimburse you the cost.
  • Not Everything Is Covered: Not every healthcare service or treatment is covered under your health insurance, so always check to see what your plan(s) won’t cover and whether you’re willing to pay out-of-pocket for it.

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Do You Need Dual Coverage?

It may seem like overkill for some families to have two health insurance plans; however, before you opt-out of one, make sure you know all the facts first. One misconception is that having dual coverage means you have double the benefits — this couldn’t be further from the truth. All COB enables you to do is prevent any gaps in coverage, so you’re less likely to have out-of-pocket medical expenses. These are some additional facts you can use to help you determine whether coordinating your coverage is in your best interest:
  • Save Money: Many couples may believe that having one plan means less monthly premiums; however, if you have free or low-cost health benefits, then it’s in your best interest to have both health plans — especially if you have children. For couples without children or for costly secondary plans, then opting out may be something to consider.
  • Higher Deductibles: You’re on the hook for two deductibles.
  • Two Insurance Providers: If you struggle to deal with one insurance provider, having two to contend with may be too much.
  • Lots To Remember: With two insurance companies, you have to know the specifics of both coverages. This can be incredibly challenging if you have different healthcare plans such as PPO or HMO, especially when finding in-network care.

The Coordination Of Benefits

There is nothing more satisfying than knowing you’ll pay less out-of-pocket just by having two healthcare plans that work synergistically with COB. In most instances, having dual coverage can help keep your medical costs down, while for others having two healthcare plans is unnecessary. Just as there is no universal healthcare plan for every individual, always be sure to investigate if having two health insurance providers is right for your household.

Jessica Fox Jessica Fox has been a freelance writer for five years, with a specialty in health, wellness, and insurance. During this time, she’s written for some of the biggest B2B and B2C brands from around the world. Jessica is also the mother of two young daughters and loves coffee, writing, and working out.

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