An insured individual has a health insurance policy that includes a 'Coordination of Benefits' provision. If this individual has coverage under two different group health plans, how will the 'Coordination of Benefits' provision typically determine which plan pays first for medical expenses?
- AThe plan of the primary insured (e.g., employee) is primary; the plan covering the individual as a dependent is secondary.
- BThe plan that has paid more benefits in the past 12 months pays first.
- CThe plan with the higher deductible pays first.
- DThe plan that has been in force the longest pays first.
Show answer & explanationAnswer & explanation
Correct answer: A. The plan of the primary insured (e.g., employee) is primary; the plan covering the individual as a dependent is secondary.
The 'Coordination of Benefits' (COB) provision typically follows the 'birthday rule' for children (not applicable here) or, for adults, dictates that the plan covering the individual as the primary insured (e.g., through their own employment) is primary. The plan covering them as a dependent (e.g., through a spouse's employment) is secondary.
Why the other options are wrong
- B. Past benefits paid do not determine primary/secondary status.
- C. Deductible amount does not determine primary/secondary status in COB.
- D. This is incorrect; duration of coverage is not a standard COB rule for primary/secondary determination.
Coordination of Benefits (COB)
A provision in group health insurance policies that prevents duplicate payment for medical services when an individual is covered under two or more health plans. It establishes which plan is primary and which is secondary.
- Prevents individuals from profiting from insurance claims.
- Common rules include the 'birthday rule' for children and 'subscriber vs. dependent' rules for adults.
- The primary plan pays first, and the secondary plan pays the remaining cost up to its own limits.
Memory trick: COB: Coordinate so no one pays for the same 'B'ill twice.