Florida 2-15 Life, Health and Variable Annuity AgentFlorida Laws and Regulations Specific to Health InsuranceMedium
A Florida resident is covered by a group health insurance policy through their employer. The policy includes a provision that specifies how benefits will be reduced if the insured has other coverage that would cause total benefits to exceed 100% of the allowable medical expenses. Which common health insurance provision is this?
- AOther Insurance Clause
- BCoordination of Benefits (COB)
- CSubrogation Clause
- DNon-Duplication Provision
Show answer & explanationAnswer & explanation
Correct answer: B. Coordination of Benefits (COB)
Coordination of Benefits (COB) is a standard provision in group health insurance that prevents an insured from collecting more than 100% of their medical expenses when covered by multiple group plans.
Why the other options are wrong
- A. Other Insurance clauses are typically found in individual policies to limit overinsurance.
- C. Subrogation allows the insurer to recover payments from a third party responsible for the loss.
- D. Non-Duplication Provision is a similar concept often used in dental or vision plans, but COB is the broader term for medical expense policies.
Coordination of Benefits (COB)
A provision in group health insurance policies that prevents multiple insurers from paying more than 100% of the actual medical expenses.
- Applies when an individual has multiple group health coverages.
- Establishes which plan is primary and which is secondary.
- Ensures total benefits do not exceed total expenses.
Memory trick: Coordinate benefits to avoid double dipping.