Life & Health Insurance Exam (National Portion)Health InsuranceMedium
An insured individual has a health insurance policy that includes a 'Coordination of Benefits' (COB) provision. The insured is covered by two group health plans, one as an employee and another as a dependent spouse. If both plans cover the same medical expenses, which plan is typically considered primary under the COB rules?
- AThe plan covering the individual as a dependent spouse.
- BThe plan with the higher deductible.
- CThe plan covering the individual as an employee.
- DThe plan that has been in effect the longest.
Show answer & explanationAnswer & explanation
Correct answer: C. The plan covering the individual as an employee.
Under standard Coordination of Benefits rules, the plan covering the individual as an employee (their own coverage) is always primary over a plan covering them as a dependent. This ensures claims are paid efficiently and prevents over-insurance.
Why the other options are wrong
- A. The plan covering the individual as a dependent is secondary to their own employee plan.
- B. Deductible amounts do not determine which plan is primary under COB rules.
- D. The length of time a plan has been in effect is not a primary factor in COB rules for employee/dependent coverage.
Coordination of Benefits (COB)
A provision in health insurance policies that prevents overpayment when an individual is covered by two or more plans, by determining which plan is primary and which is secondary.
- Prevents duplicate payments.
- Determines primary and secondary payers.
- Employee's own plan is usually primary over dependent plan.
Memory trick: Coordinate Benefits: Employee First!