If I Have Two Health Insurance Policies, Which Is Primary?

When individuals have more than one health insurance policy, determining which plan pays first can be confusing. This often occurs due to life events like being covered by your employer’s plan and your spouse’s, or transitioning between different types of coverage. Understanding how these plans coordinate benefits is essential for efficient and correct claims processing. This article clarifies how to identify primary and secondary health insurance policies and explains the rules governing their interaction.

Understanding Coordination of Benefits

Coordination of Benefits (COB) is a standardized process that determines which health insurance plan pays first when an individual has coverage under two or more plans. Its primary purpose is to prevent overpayment of medical claims by ensuring combined benefits do not exceed the total cost of services. COB also ensures a fair distribution of costs among insurers.

Under COB rules, one plan is designated as the “primary insurer,” paying for covered medical expenses first, up to its policy limits. Any remaining balance, after the primary plan has paid, is then submitted to the “secondary insurer.” The secondary insurer may cover additional costs like deductibles, copayments, or coinsurance, based on its own policy terms. The secondary plan will not pay for services the primary plan would have covered if it had been the sole insurer.

General Rules for Primary Coverage

Several general rules dictate which health insurance policy is primary in common situations. If you are covered by your own employer-sponsored health plan and also by your spouse’s, your own plan is designated as the primary payer for your medical expenses. A group health plan offered through an employer is primary over an individual health plan purchased directly from an insurer.

When an individual has coverage through an active employment plan and also through a retiree plan or COBRA, the active employee’s plan acts as the primary payer. If you obtain new active group health coverage while maintaining COBRA coverage from a previous employer, the new active group plan becomes primary, with the COBRA plan serving as the secondary insurer.

Special Situations for Primary Coverage

More specific rules apply in various circumstances to determine primary coverage. For children covered by two insured parents, the “Birthday Rule” applies: the health plan of the parent whose birthday falls earlier in the calendar year is primary, regardless of the parent’s age. For instance, if one parent’s birthday is in March and the other’s in August, the plan of the parent with the March birthday would be primary.

In cases involving children of divorced or separated parents, coordination rules can vary. A court order may specify which parent’s plan is primary. If no court order exists, the custodial parent’s plan is primary. Some plans may designate the primary policy based on the plan that has covered the child for the longest continuous period.

When Medicare is involved, its coordination with private insurance depends on employment status and employer size. If an individual is actively working and covered by an employer’s group health plan, and the employer has 20 or more employees, the employer’s group health plan is primary, and Medicare is secondary. If the employer has fewer than 20 employees, Medicare acts as the primary payer, and the employer’s plan is secondary. For those with Medicare and a Medicare Supplement (Medigap) policy, Medicare pays first, and the Medigap policy pays secondary to cover out-of-pocket costs like deductibles and copayments. Medicare Advantage plans, which are private plans that replace original Medicare, coordinate benefits differently as they are the primary payers for Medicare-covered services.

Medicaid, a state and federal program for low-income individuals, is the “payer of last resort.” If an individual has Medicaid and any other health insurance, the other plan is primary. Medicaid will only pay for covered services after all other available insurance plans have paid their portion. TRICARE, the healthcare program for uniformed service members, retirees, and their families, also has specific coordination rules. TRICARE is secondary to other health insurance plans, such as employer-sponsored coverage, but it can be primary in certain situations, like when the other plan is Medicaid or a limited-scope dental plan.

Processing Claims with Multiple Policies

When you have two health insurance policies, submitting and processing claims involves a specific sequence. Provide details for both your primary and secondary insurance plans to your healthcare provider at the time of service. This allows the provider to accurately bill the correct insurer first, minimizing potential delays. The provider’s billing office will send the claim to your primary insurer initially.

After the primary insurer processes the claim, they will issue an Explanation of Benefits (EOB) outlining what they paid and any remaining balance. This EOB, along with the remaining balance, is then forwarded by the provider to your secondary insurer. The secondary insurer will apply its own benefits, deductibles, copayments, and coinsurance rules to the remaining charges. If there are discrepancies or issues with how a claim was processed, such as a denial or an unexpected balance, first contact your primary insurer for clarification. If the issue persists, contact your secondary insurer or the healthcare provider’s billing department for assistance.