A process used in the insurance industry to determine the order in which multiple insurance plans will pay claims for the same individual’s medical expenses. This prevents overpayment and ensures that no more than 100% of the total costs are covered.
The insurance plan that pays first in a COB scenario. Typically, this is the plan that covers the individual as an employee or through their own policy.
The insurance plan that pays after the primary insurance in a COB scenario. This could be a plan through a spouse’s employer or a secondary coverage the individual holds.
A statement sent by an insurance company to the policyholder, detailing what medical treatments and/or services were covered, the amount paid by the insurance, and any remaining costs the policyholder may owe.
The maximum amount an insurance plan is willing to pay for a specific medical service. If a provider charges more than this amount, the excess may be the responsibility of the patient.
A clause in insurance policies that prevents individuals from receiving double benefits for the same medical expense. This ensures that the total reimbursement from all policies does not exceed the actual cost of the service.
A method used to determine the primary insurance for dependent children whose parents have separate insurance coverage. The parent whose birthday falls earlier in the calendar year is considered the primary insurer for the child.
The timeframe during which the coordination of benefits applies. This period could vary depending on the terms of the insurance policies involved.
Refers to situations where an individual’s medical expenses are covered by someone other than themselves or their insurance provider. For example, in cases of auto accidents, the at-fault driver’s insurance may be liable for medical expenses.
Some insurance plans allow policyholders to opt out of coordination of benefits, typically when they have dual coverage through their employer and their spouse’s employer. This can simplify claims processing but may result in higher out-of-pocket costs for the policyholder.
A situation where both the primary and secondary insurance plans cover a specific medical expense during the same timeframe. In such cases, coordination of benefits becomes crucial in determining the appropriate payment amounts.
The Consolidated Omnibus Budget Reconciliation Act allows individuals to continue their employer-sponsored health insurance coverage for a limited time after leaving their job, under certain circumstances. COBRA coverage may also be subject to coordination of benefits rules if the individual has other insurance coverage.