Can You Have Health Insurance With Two Different Companies?

Having health insurance from two different companies is possible and common. This arrangement, known as dual coverage, means an individual is enrolled in two separate health insurance policies simultaneously. While dual coverage does not mean medical services are paid for twice, it impacts how claims are processed and which insurer pays first.

Common Reasons for Dual Coverage

Dual health insurance coverage arises from several common situations:

An individual covered by their own employer’s plan and as a dependent under a spouse’s employer-sponsored plan.
Job transitions, maintaining COBRA from a previous employer while enrolling in a new employer’s plan.
Older adults with Medicare combined with a private supplemental or employer-sponsored retiree plan.
Students under 26 covered by a school-sponsored or employer plan while remaining on a parent’s policy.
Individuals with a private health plan in addition to qualifying for a government program like Medicaid.

How Coordination of Benefits Works

Coordination of Benefits (COB) determines how two health insurance plans work together to pay for medical expenses. COB prevents overpayment by ensuring combined payments do not exceed the total cost. It also establishes which plan is “primary” (pays first) and which is “secondary” (pays second).

The primary insurer pays for covered services according to its policy terms, including any deductibles, co-payments, or co-insurance. After the primary plan has processed the claim, the secondary insurer then reviews the remaining balance and may cover some or all of the unpaid costs, depending on its own benefits and limits.

Several common rules dictate primary and secondary status. If an individual is covered by their own employer’s plan and also as a dependent on a spouse’s plan, their own employer-sponsored coverage is typically considered primary. For dependent children covered by both parents’ plans, the “birthday rule” is commonly applied; the plan of the parent whose birthday falls earlier in the calendar year (month and day, not year) is usually primary. If both parents share the same birthday, the plan that has covered the individual for a longer period generally becomes primary.

In situations involving divorced or separated parents, the primary plan for a child is often determined by the custodial parent’s plan, though court orders specifying financial responsibility can override this. If a person has active employment coverage and also COBRA continuation coverage, the active employee plan is usually primary. For individuals with Medicare, if they are still actively working for an employer with 100 or more employees, their employer’s plan is typically primary; otherwise, Medicare is often primary.

Submitting Claims with Multiple Plans

When an individual has dual health insurance coverage, submitting claims involves specific steps. The healthcare provider typically submits the claim directly to the primary insurance company, which processes it according to its policy terms, applying any deductibles, co-payments, or co-insurance.

After the primary insurer processes the claim, they issue an Explanation of Benefits (EOB) document detailing what the primary plan paid and any remaining balance. The policyholder or provider then submits this EOB, along with the original claim information, to the secondary insurance company. The secondary insurer reviews the EOB to determine what portion of the remaining balance it will cover, based on its own benefits and coordination of benefits rules. Policyholders should retain copies of all medical bills, receipts, and EOBs for their records.

Important Considerations for Dual Coverage

While dual health insurance can reduce out-of-pocket costs, it involves several practical considerations:

The cost of premiums for both plans, which must be weighed against potential savings on deductibles, co-payments, and co-insurance.
Administrative complexity, leading to more paperwork and communication with multiple insurers.
Each plan having its own deductible and out-of-pocket maximum, meaning the secondary plan may not eliminate all costs.
Different provider networks, potentially limiting choices or resulting in higher costs if a provider is out-of-network for one plan.
Informing both insurance companies about other coverage to facilitate smoother claim processing and avoid delays.