What’s the Difference Between Primary and Secondary Health Insurance?

Believe it or not, you can have more than one health insurance plan. Which begs the question, if you can have more than one health insurance, how does it work? It’s easier than you think to end up with two health insurance plans. These are some of the ways you may end up with dual coverage:

Spouses both have employer-sponsored health insurance plans
You have personal health insurance and employer-sponsored coverage
Two employer-sponsored health plans and Medicaid
A young adult (under the age of 26) who has employer-sponsored health insurance and coverage under their parents
Employer-sponsored coverage and worker’s compensation
Military member (active duty or veteran) with personal health insurance

The good news is, dual coverage can be great for your wallet and for giving you extra coverage. Keep reading to find out how.

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Primary and Secondary Insurance Coverage

It’s worthwhile to note that just because you have primary and secondary health insurance, it doesn’t mean you won’t have any medical expenses. Primary and secondary insurance work together to pay your medical bills. Your primary plan pays out first to their maximum, and then the secondary coverage will pay to their limit. Keep in mind that even with two health plans, your insurance will only cover up to 100% of your bill, no more.

In addition, policyholders may be on the hook for copays or deductibles, so even with two health insurance plans in your corner, you could still have to pay out of pocket.

How Does Primary and Secondary Insurance Work?

Perhaps the most confusing thing about having two health insurance plans is how they work together. This process is called the coordination of benefits (COB). COB can be state-regulated or internally regulated — large businesses use their own COB framework. The point of COB is to ensure that everyone pays their fair share, so no one is on the hook for 100% for the medical expenses. COB works like this:

The primary insurer pays up to its payout maximum
Supplemental coverage pays its portion
The policyholder pays any remaining charges

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Determining Which is Primary Coverage

Another common question is, how do you know which health insurance plan is the primary health insurance plan? Although there are no universal rules to determine this, certain scenarios will help you determine which of your health plans is the primary or secondary health insurance.

Employer-sponsored insurance: Primary coverage is your company, secondary is your spouse’s plan.
Children: Primary coverage for a married couple with children and two health insurance plans relies on the birthday rule (parent with the earlier birthday is primary). These are some other ways to determine primary coverage for children:
- The parent with sole custody of a child is primary.
- A child’s (under 26) work/school policy is primary.
- Primary goes to the child’s plan if they are married or pregnant.
Worker’s Compensation: Worker’s compensation is primary over a personal health insurance plan.
COBRA: Employer plan takes primary over COBRA.
Medicare: Medicare is primary if the company has 0-100 employees; otherwise, private insurance is primary.
Veterans Administration (VA): Private health insurance is primary over VA.
Military (TRICARE): Private insurance is primary; TRICARE is secondary unless you have Medicaid.
Medicaid: Private health insurance is primary.

What’s the Difference Between Primary and Secondary Insurance?

As the coverage types suggest, primary coverage is the first insurance plan to pay out to its payout maximum. A secondary plan only comes into effect if there is a remaining balance. Remember, your primary health insurance depends on your unique situation. For instance, if you and your spouse have employer-sponsored insurance, your plan will be primary while your partner’s plan becomes secondary. The main difference between primary and secondary health insurance:

Primary: Your primary health insurance plan will payout up to its maximum limit, and then they pass the remaining balance to the secondary insurer for review.
Secondary: Upon reviewing the claim, the secondary health insurance plan will pay up to its limits. If there is a remaining balance, the policyholder pays the rest.

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Primary vs Secondary Health Insurance

If you’re fortunate enough to have double the health insurance, understanding how your primary and secondary health insurance function will simplify your life. You can fully utilize your health insurance by understanding your coverage, so you pay less out of pocket! It will also give you peace of mind that your medical bills are covered, no matter what happens.

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.