Coordination of Benefits: Should You Have 2 Health Insurance Plans? (2024)

Having access to two health plans can be good when making health care claims. Having two health plans can increase how much coverage you get. You can save money on your health care costs through what's known as the "coordination of benefits" provision. Here's what you need to know about using two health care plans and how it works.

Key Takeaways

  • Having access to two health plans can increase how much coverage and save money on your health care costs through the "coordination of benefits" provision.
  • When an insured person has two health plans, one is the main plan, and the other is the second plan.
  • In there's a claim, the primary health plan pays out first, while the second plan pays some or all of the costs the first plan didn't pay.
  • If you and your spouse or partner both have a health care plan at work, and your children are covered on both plans, the second plan can pay some of the costs the first plan didn't.

What Is Coordination of Benefits?

When a person is covered by two health plans, coordination of benefits is the process the insurance companies use to decide which plan will pay first and what the second plan will pay after the first plan has paid.

As an example, if your spouse or partner has a health care plan at work, and you have access to one through work as well, your children could have coverage through both plans. Once the main plan pays, rather than having to pay the rest, you could see the second plan paying some of what you would have had to pay if you didn't have it. You can use both plans to get the most out of your children's health care.

Note

In some cases, one plan may provide better care in one area, like mental health coverage. The other plan may offer better coverage in some other area. You can get the best of two health plans when you combine care.

How Having Two Health Plans Works

When an insured person has two health plans, one is the main plan, and the other is the second one. In the event of a claim, the primary health plan pays out first. The second one kicks in to pay some or all of the costs the first plan didn't pick up. Some of the health care costs to consider when deciding how to manage your health care plans are outlined below.

Deductible

Your deductible is the amount you need to pay out of pocket each year before your insurance covers any of your medical costs, including appointments and prescriptions. For example, your insurance plan might have a $2,000 annual deductible, which means you need to cover the first $2,000 in costs each year before your insurance covers any expenses.

Copay

A copay—short for copayment—is an amount you pay at the time of each doctor’s appointment. Typically it's a small fee, such as $15 or $25 for your primary doctor. However, the copay might be higher for a specialist or other service.

Coinsurance

Coinsurance is a set percentage of the cost of service that you must share in paying. For example, your insurance provider might pay 80% of the cost of a service, while you'd be responsible for 20%. Coinsurance costs can be expensive if you or a family member need extensive care, such as a hospital stay or surgery.

Should You Keep Two Health Care Plans?

If you have access to two health care plans, you could end up paying less money out of your own pocket for expenses the first plan doesn't cover. For example, if your first plan has a deductible or copay, the second plan may pay for that.

Does a person with two health care plans get double benefits? Not exactly. Having two health plans does help cover any health care costs better through the coordination of benefits provision.

If you are thinking you will save money on health insurance by only having one plan, think about how combining care works and what health care costs you have before signing a health insurance waiver and giving up a second plan. If your plan through your own job is free, and your partner can add you to their plan for a low cost, you should keep both plans.

Note

Here's how a person may have two health care plans:

  1. A child's parents each have access to a health plan at work. Children can be covered under both plans if the parents decide to include them.
  2. Married couples or domestic partners who each have access to a health plan through their job may put each other on their plans.

Understanding Coordination of Benefits System

The health plan coordination of benefits system is used to ensure both health plans pay their fair share. When both health plans combine coverage in the right way, you can avoid a duplication of benefits while still getting the health care to which you're entitled.

Health plans combine benefits by looking at which health plan is the patient's main plan and which one is the backup plan. There are guidelines set forth by the state and health plan providers that help the patient's health plans decide which health care plan is the main plan and which is the second plan.

Note

If you have two health plans, you may be asked to declare which one you want to name as your main plan. Do your research to decide which plan will work better as your main plan.

Once you've named one plan as your first plan, that plan will pay what is required without looking at what the second plan covers. Once the main plan has paid the costs it has to pay, the second plan will be used.

Your second health plan, unlike your first plan, can look at what health care service was provided to you by the main plan. The health care costs that are still due will then be looked at for payment under the second health care plan.

Medicare Combined With a Group Plan

If you’re 65 or older, have group health plan coverage based on your or your spouse's current employer, and it has 20 or more employees, the group plan will pay first. If they have less than 20 employees, Medicare will kick in first.

Reasonable and Customary Costs

There are some rules that health plan providers follow that could cause a person covered by two plans to still have to pay for some health care costs. One such area is the "reasonable and customary" amount.

Most health plans will only cover costs that are reasonable and customary. In other words, the health plan provider will not pay for any services or supplies that are being billed at a cost that is more than what is the usual charge for the treatment in the area where the treatment takes place.

You May Still Need To Pay Some Costs

Once your main plan pays the reasonable and customary amount on a health care service, there may still be a balance due. This could happen if the health care provider was charging more than what the main plan felt was reasonable and customary.

The second plan does not have to pay the amount the first plan did not pay if the charge is deemed out of the normal limit. The insured person could still end up paying out-of-pocket. This could still happen even if there are two health plans.

What's more, neither health care plan will cover the cost of a service that is not covered under their health care plans. If both plans do not cover a certain test, for example, the second one doesn't have to pay after the first one denies the expense.

People with more than one health care plan should discuss with their health plan providers how combining plans will work with their plans. This way, they can see what health care coverage they can expect.

Frequently Asked Questions (FAQs)

If you have two insurances, will you have a copay?

If you have two health insurance plans, the second may pick up any copayments or additional costs that were not covered by your primary insurance. Your copay may or may not be covered. So, be sure to check with each of your insurance plans.

Will I lose my Medicaid when I am eligible for Medicare?

No, Medicaid and Medicare work together well, and between the two, most of your costs should be completely covered. Some states even offer Medicaid-Medicare plans that offer more coverage options.

Coordination of Benefits: Should You Have 2 Health Insurance Plans? (2024)

FAQs

Does it make sense to have two health insurance plans? ›

If you have a chance to get a health plan with no or very low premiums, adding a secondary health plan may make sense. If a second plan would cost a lot each month, it might be a better idea to stick with one plan.

When a patient has two insurances and they must be coordinated? ›

Coordination of benefits is the process that allows a plan to determine their respective payment responsibilities. Basically, if a patient has multiple insurance plans that are active, which one is responsible for covering the patient first, second, and third.

What happens if a patient has coverage under two insurance plans? ›

Remember, having multiple plans doesn't guarantee that your healthcare will be free. Despite the surplus insurance coverage, you typically will still pay copays, coinsurance, and other out-of-pocket costs. For example, most plans charge a copay to see a specialist, so multiple policies won't nullify this requirement.

Which insurance is primary when you have two? ›

Usually, your employer's plan is primary. If you also are covered by your spouse's plan, that plan is usually secondary. There are other rules for many other situations. A special case may come up if you have both medical and dental insurance, and you have a procedure such as oral surgery.

How do you determine which insurance is primary? ›

The insurance that pays first is called the primary payer. The primary payer pays up to the limits of its coverage. The insurance that pays second is called the secondary payer. The secondary payer only pays if there are costs the primary insurer didn't cover.

How do copays work with two insurances? ›

In most cases their secondary policy will pick up the copay left from the primary insurance. There are some cases where the secondary policy also has a copay and those patients may end up with a copay applied after both insurances process the claim.

What are the problems with coordination of benefits? ›

Challenges of coordination of benefits

Overlapping Policies: Determining which policy pays first can be confusing. Patients with dual coverage might not always be aware of the hierarchy, leading to billing complications. And many legacy systems only select the primary, without consideration for secondary or tertiary.

What are the coordination of benefits rules? ›

The COB Process:

Ensures claims are paid correctly by identifying the health benefits available to a Medicare beneficiary, coordinating the payment process, and ensuring that the primary payer, whether Medicare or other insurance, pays first.

When a patient has dual coverage the primary insurance is? ›

General Coordination of Benefits Rules

Employee/Main Policyholder - When both plans have COB provisions, the plan in which the patient is enrolled as an employee or as the main policyholder is primary. The plan in which the patient is enrolled as a dependent would be secondary.

What is it called when a patient has two insurances getting both insurances to pay? ›

Dual health insurance coverage occurs when an individual is covered under both their own insurance plan and their spouse or partner's plan. In this scenario, the individual's own insurance plan is considered the primary payor, while the insurance plan of their spouse or partner serves as the secondary payor.

Why do insurance companies ask if you have other insurance? ›

Life insurance companies ask about other insurance policies to assess the overall risk they are undertaking when insuring an individual. Knowing about other policies helps insurers determine the policyholder's financial exposure and ensure that the coverage amount is appropriate.

What happens if an insured has coverage through two different insurance companies? ›

Your two insurance companies will need to agree with one another about who will cover what part of the claim, which can dramatically extend the amount of time it takes for you to receive a settlement. Your premium costs from both insurers will rise after a claim.

Is it beneficial to have two health insurances? ›

There are benefits and drawbacks to having two health insurance plans. A secondary health insurance plan may be able to cover expenses that your primary plan doesn't. Your overall out-of-pocket costs may be reduced if the plans complement each other to help limit your individual responsibilities.

How does billing work with two insurances? ›

Your primary insurance will typically be billed first unless there is a rule under your Coordination of Benefits provision that decides which insurance pays first. Once your primary insurance has done its part, you can then send the bill on to your secondary insurance.

Which insurance to use as primary? ›

How do you determine which health insurance is primary? Determining which health plan is primary is straightforward: “If you are covered under an employer-based plan, that is primary,” Mordo says. If you also were covered under a spouse's plan, that would be secondary, he adds.

Can I have my own health insurance and be on my parents at the same time? ›

Yes, you can have your own health insurance plan while staying on your parents' policy. This is called having dual coverage.

Should my wife and I be on the same health insurance? ›

Can married couples have separate health insurance? Spouses do not have to be on the same plan, which means that if you both have individual plans that you love, there is no reason to lose that coverage. However, you also have the option to be on the same plan, which may be a more economical choice for some couples.

How does Medicare work when you have other insurance? ›

If you have Medicare and other health insurance (like from a group health plan, retiree coverage, or Medicaid), each type of coverage is called a "payer." The "primary payer" pays up to the limits of its coverage, then sends the rest of the balance to the "secondary payer."

Why do I need supplemental health insurance? ›

Supplemental health plans pay for expenses that health insurance doesn't cover, such as dental, vision, disability and long-term care insurance. A supplemental policy like critical illness insurance can pay you a lump sum payout if you're diagnosed with certain medical conditions.

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