How to Determine Primary Insurance With Multiple Plans

Having more than one health insurance plan offers extensive coverage but complicates determining which plan pays first. Understanding primary and secondary insurance roles is essential for managing healthcare costs and ensuring claims are processed efficiently.

Defining Primary and Secondary Coverage

When an individual has multiple health insurance plans, these plans are categorized as either primary or secondary. The primary insurance plan pays for healthcare services first, up to its coverage limits. When a medical claim is submitted, the primary insurer reviews and processes it before any other plan, typically bearing the majority of the initial cost.

After the primary insurance has paid its portion, any remaining balance for covered services is then submitted to the secondary insurance plan. The secondary plan assesses the leftover amount and pays according to its own benefits and coverage terms. While secondary coverage can significantly reduce out-of-pocket costs, it does not guarantee that all remaining expenses will be covered, as deductibles, copayments, or coinsurance may still apply.

Coordination of Benefits Principles

The process insurance companies use to determine which plan pays first when an individual has multiple health insurance coverages is known as Coordination of Benefits (COB). COB rules are designed to ensure that benefits are not overpaid and that each plan pays its fair share of medical expenses. These rules can vary depending on the insurance company, the specific plans involved, and sometimes state regulations.

One common COB principle is the “Birthday Rule,” which primarily applies to dependent children covered by both parents’ health insurance plans. Under this rule, the health insurance plan of the parent whose birthday falls earlier in the calendar year (considering only the month and day, not the year) is designated as the primary plan. The plan of the parent with the later birthday then becomes the secondary payer.

For individuals with both active employment coverage and continuation coverage, such as through the Consolidated Omnibus Budget Reconciliation Act (COBRA), the plan from current employment is typically primary. The COBRA coverage would then function as the secondary plan.

When an individual has both private insurance and government programs like Medicare or Medicaid, specific COB rules apply. For Medicare, the primary or secondary status often depends on factors such as the individual’s age, working status, and the size of the employer providing the group health plan. Generally, if an individual aged 65 or older is still working and covered by an employer group health plan from an employer with 20 or more employees, the employer plan is primary, and Medicare is secondary. However, if the employer has fewer than 20 employees, Medicare usually becomes the primary payer. For individuals under 65 with a disability, the employer group health plan is primary if the employer has 100 or more employees, otherwise Medicare is primary. If an individual has retired and has retiree health coverage from a former employer, Medicare is typically primary.

Medicaid generally acts as the “payer of last resort,” meaning it pays after all other available third-party resources have met their legal obligation. This means if a Medicaid beneficiary also has private health insurance, the private insurance typically pays first, and Medicaid may cover remaining eligible expenses. Exceptions can exist for certain prenatal and pediatric services.

Applying Rules to Common Situations

When both spouses have employer-sponsored health insurance plans, each individual’s own employer-sponsored plan is generally primary for their medical claims. The spouse’s plan would then serve as the secondary coverage for that individual.

For children covered by both parents’ plans, the Birthday Rule is applied. The plan of the parent whose birthday occurs earlier in the calendar year (month and day) is primary for the child. For instance, if one parent’s birthday is in March and the other’s is in October, the March birthday parent’s plan would be primary. If both parents share the same birthday month and day, the plan that has covered a parent for a longer continuous period usually becomes primary.

In cases where children have divorced or separated parents, the determination of primary coverage can be more complex. Typically, the health plan of the custodial parent is primary. If the custodial parent remarries, their new spouse’s plan may become secondary, with the non-custodial parent’s plan potentially becoming tertiary. Court orders or divorce decrees can also specify which parent’s plan is primary, and insurance companies should be notified of such arrangements.

For individuals with both Medicare and employer-sponsored health insurance, the primary payer depends on the employer’s size and the individual’s working status, as outlined in the Coordination of Benefits Principles.

Individuals with private insurance and Medicaid follow a “payer of last resort” rule for Medicaid. Private health insurance is almost always primary, covering expenses first. Medicaid then acts as the secondary payer, potentially covering remaining eligible costs or services not fully paid by the private plan. It is important to report other insurance coverage to the state Medicaid agency.

When a medical claim arises from a Workers’ Compensation or No-Fault (auto insurance) incident, these specialized coverages often take precedence over standard health insurance. Workers’ Compensation is typically primary for work-related injuries. For auto accidents, no-fault auto insurance, if elected with coordinated benefits, generally means the health insurance plan pays first for accident-related medical expenses, with the no-fault auto insurance acting as secondary. However, if the auto insurance is uncoordinated, it pays first. It is important to understand the specific terms of both auto and health insurance policies, as some health plans may have exclusions for auto-related claims.

Managing Your Multiple Plans

After determining your primary health insurance plan, inform both your primary and secondary insurance companies about your other coverage. This helps them coordinate benefits and prevent delays or denials in claims.

When submitting a claim for medical services, file it with the primary insurer first. Once the primary insurance processes the claim and pays its portion, they issue an Explanation of Benefits (EOB). This EOB details what the primary plan paid, what was applied to your deductible, and any remaining balance. The remaining balance, along with the primary insurer’s EOB, is then submitted to your secondary insurance plan for their review and payment.

Understanding and interpreting the EOBs from both plans is important. These documents explain how much each insurer has paid and what, if any, is your remaining financial responsibility. Keep these EOBs and all related medical bills and payment receipts organized, as they serve as crucial records for tracking your healthcare expenditures and verifying payments.

If discrepancies or issues arise with the coordination of benefits, such as denied claims due to incorrect primary/secondary designations, review your policy documents to understand the COB provisions. Then, contact the customer service departments of both your primary and secondary insurance companies. Explain the situation, provide them with details of your other coverage, and ask for assistance in resolving the issue. Document the dates and times of calls, the names of representatives you speak with, and any reference numbers provided. If issues persist, you may have the option to appeal denied claims following the insurer’s appeal process.