Coordination of benefits
Coordination of benefits (COB) applies to the payment of health-care benefits when
a member is covered by two or more benefit plans. One of the health plans will be
primary and the other secondary. The primary plan pays first following its schedule
of benefits; then the payments under the secondary plan are coordinated so that
combined plan payments do not exceed 100 percent of covered charges. COB is sometimes
called liability recovery.
- If the employee is covered by a group contract and also by a spouse's plan, the
employee's plan is primary.
- If the employee is covered by two group contracts, the plan with the earliest effective
date is considered the primary plan.
- To determine which plan is primary for dependent children covered by more than one
health plan, insurers use the birthday or gender rule.
- If the health plans of both parents use the birthday rule, the plan of the parent
whose birthday falls earlier in the year (month and day) is primary for the dependent
children. If the month and day are the same, the policy that was in effect first
- If the health plans of both parents use the gender rule, the father's plan is always
primary for dependent children.
- If the health plan of one parent uses the birthday rule and the other uses the gender
rule, the gender rule prevails, and the father's plan is primary.
- There are exceptions when a divorce decree determines which health plan is primary.