You are here: Home Insurance Health Insurance ... Coordination Of ... Summary
Information about all aspects of finances affected by a serious health condition. Includes income sources such as work, investments, and private and government disability programs, and expenses such as medical bills, and how to deal with financial problems.
Information about all aspects of health care from choosing a doctor and treatment, staying safe in a hospital, to end of life care. Includes how to obtain, choose and maximize health insurance policies.
Answers to your practical questions such as how to travel safely despite your health condition, how to avoid getting infected by a pet, and what to say or not say to an insurance company.


If you have health insurance through more than one plan, and at least one of the policies is a group policy, there are rules that coordinate the two policies. These rules are known as "coordination of benefits." Coordination of Benefits provisions eliminate the potential for insureds to obtain reimbursement for medical expenses from more than one insurer when there is more than one health insurance coverage. Without coordination of benefit provisions, an insured could obtain reimbursement for more than 100% of the cost of a medical service.

The same rules apply to all types of health insurance.

  • Step 1. Look at the Coordination of Benefit rules to understand what happens between the "primary" company (the one to pay first) and the "secondary" company ''" the one to pay second.
  • Step 2. Determine which insurer is "primary" and which is "secondary".
  • Step 3. Tweak the rules if one or both plans are of the managed care variety, such as HMOs.

If one of your coverages is through Medicare, special rules apply.

If you are one of the rare people who has two individual policies, there are no standardized coordination of benefits rules.

For information, see:

To learn about filing a claim, see: How To File A Claim Where There Is More Than One Health Insurance Coverage, Medicare Coordination of Benefits.

To Learn More

More Information

Health Insurance Claims

What is Coordination of Benefits?

There are industry wide rules to determine which health insurance pays first and which pays second when a person has more than one health insurance plan

Coordination of benefits are intended to assure:

  • That your medical bills are paid without conflict or delay.
  • That neither you nor the health care provider make a profit because of the existence of more than one insurance plan.

How Coordination of Benefits Works

As a practical matter: when you're asked for information about your coverage, give the information about all your coverages if you have more than one health insurance plan. The health care provider will sort out what to do to get paid.

In case you have an indemnity type coverage where you have to submit bills, or you have to follow up, it's important to understand how coordination of benefits works:

Step 1. When a bill is submitted, the insurance company that receives the bill checks to see if there is other health coverage. If there is, the company applies the "coordination of benefits" rules to determine which company is "primary" and which company is "secondary."

Step 2.The "primary" company pays the full amount it would have paid if it were the only plan you have.

Step 3. The "primary" carrier will then send the insured an Explanation of Benefits describing what it paid and why.

Step 4. If the "primary" carrier did not pay the entire bill, including co-pays and deductibles, the insured must then submit the bill to the "secondary" carrier.

Step 5. The "secondary carrier" then pays the difference between the actual bill and the amount that the primary plan paid. The secondary carrier never pays pay more than it would have paid if it had been the only plan except in one instance. The exception involves the situation in which the primary payer covers something that the secondary payer does not. In that case, the secondary payer will still cover part of the bill to a maximum equal to the amount the company saved by being secondary.

Between the two insurance companies up to 100% of your medical bills would be covered.

Neither plan will pay a total of more than it would have paid if it were the only plan.

Neither plan will cover something that is not covered under either policy. For example, if neither plan covers telephone charges in the hospital, neither one will pay for such charges.

In the event of a dispute between two plans,the general rule is that the Primary Payer is the plan that has insured the person the longest.

Two Examples Of How Coordination Of Benefits Works

Let's take a look at two examples. In the first example, the charge is covered under both plans. In the second, the charge is covered under the first plan, but not the second plan.

Example #1: Charges covered under both plans.

  • Suppose you're covered under your employer's plan. In addition, you are also covered as a dependent under your spouse's plan. Your bill includes out-patient laboratory charges that total $2,500. The bills are submitted to both insurance companies.
    • As you will see below, your plan is the Primary Payer. It pays what it would normally pay, let's say 80% of the bill. So the Primary Payer (your plan) pays $2,000 ($2,500 x 80% = $2,000). If there weren't two policies, you would be expected to pay the remaining $500 the Primary Payer did not pay.
    • The Secondary Payer, your spouse's plan, would also cover 80% but it has a $500 deductible. In the absence of any other plan, your spouse's plan would have paid $1,600 ($2,500 - 500 x 80%). However, since there is a balance due of only $500 after the Primary Payer makes its payment, that is all that the Secondary Payer has to pay. The benefit to you is that you don't have to pay anything. Between the two plans, the entire bill is covered.

Example #2: Charges covered under one plan, but not the other.

  • Suppose Jacques goes to a naturopathic doctor who charges $200. Naturopathic doctors are covered by the primary payer, but only to the extent of 60% of the bill. In this case, the primary plan pays $120 ($200 x 60%), leaving $80 unpaid. The secondary payer doesn't cover naturopathic doctors at all. Since the only charge was for the doctor, the secondary payer pays nothing. There was no pot of savings for the secondary payer, and Jacques must pay the remaining $80.
  • Alternatively, if the naturopathic doctor was part of a medical doctor's practice, part of the bill was from an M.D. who billed $100 for lab tests, and lab tests were covered 100% under both plans, the result would be as follows:
    • The primary payer would pay $120 for the naturopath and $100 for the lab tests since that is what the payer would have had to pay whether there was a secondary payer or not.
    • The secondary payer would then calculate what it would have had to pay if the primary payer weren't involved. In this case, that would have been $100 for the lab test, and nothing for the naturopath -- for a total of $100. Since all that is left out of the total bill is $80, the secondary plan will pay $80 even though it could be argued that the money was really paying for a naturopath who is not covered under the plan.

How To Determine Which Plan Is Primary In General

The rules to determine which plan is primary and which plan is secondary depend on whether the plans are group of individual, Medicare and/or Medicaid:

  • Both coverages are group health insurance and both have Coordination of Benefits provisions.
  • Both coverages are group health insurance but one of them does not have a Coordination of Benefits provision.
  • One of the coverages is Medicare.
  • One of the coverages is Medicaid.
  • One of the coverages is an individual health insurance plan.
  • There are three coverages in effect.

How To Determine Which Plan Is Primary: Both Plans Are Group Health Coverage And Both Have Coordination Of Benefits Provisions Included In The Policy

  • Your plan is primary. Your spouse or significant other's plan is secondary.
  • If your spouse or significant other has a claim, his or her policy is primary for him or her and yours is secondary.
  • For children, as strange as it sounds, if both parents have group plans, the plan which covers the parent whose birthday comes earliest in the year is primary.
  • In the event of a dispute between the two plans, the plan that has insured the person the longest is primary.
  • If you have two group policies, the plan that has insured you the longest is primary.

How To Determine Which Plan Is Primary: One Plan Is Medicare. The Other Plan Is A Group Health Plan.

The rules about coordinating two coverages are different if you have Medicare and another health insurance coverage.

For more information, see: Medicare, Coordination of Benefits.

How To Determine Which Plan Is Primary: One Plan Is Medicaid; The Other Plan Is A Group Health Plan.

Medicaid, by law, is secondary to every other plan, including a group health plan.

How To Determine Which Plan Is Primary: One Plan Is An Individual Health Insurance Plan; The Other Plan Is Group Health Coverage.

Because individual plans do not have the Coordination of Benefits provision attached, there is no coordination between the two plans.

If you're covered under a group plan and an individual health insurance plan, each plan will pay their full benefits without regard to what the other plan pays. This means someone covered under a group plan and an individual plan could actually make a profit.

For example, if the bill is $4,000, the group plan pays $3,000 and the individual plan pays $2,500, you would be entitled to keep the $1,500 left over after paying the bill.

How To Determine Which Plan is Primary: There are three plans in effect.

The rules are the same as if there were two plans, but they must be applied to each plan in turn. Confusion can often result.

For Example:

  • Your employer continues your health insurance as long as you collect Long Term Disability benefits;
  • you are covered as a dependent under your spouse's plan who works for a company with 150 employees;
  • you are under age 65 and eligible for Medicare due to disability (not End Stage Renal Disease).

According to the rules:

  • Your plan is Secondary to Medicare since you are disabled and therefore considered a "retiree" for Medicare purposes.
  • Your plan is Primary to your spouse's because you are the employee under your plan.
  • Your spouse's plan is Primary to Medicare since that coverage comes through someone actively working and there are over 100 employees.

Generally, in this situation, Medicare will accept liability as being Primary, letting your plan be Secondary and your spouse's plan be Tertiary (Third).

To see what would happen between two plans, see How To Determine Which Plan is Primary and click on the description of your situation.

In the event of a dispute between two plans, the general rule is that the plan that has insured the person the longest is the Primary Payer. If this rule were used in the above example, your plan would be the Primary Payer since it had covered you longer than Medicare.

For more information about Medicare, see: Medicare, Coordination of Benefits.

When One or Both Plans are HMOs

Applying the Coordination of Benefits provision gets more complicated when one or both of the plans is an HMO. Part of the complication lies in how health plans work in general:

  • Indemnity type plans and PPO plans are not liable to pay anything the insured would not have had to pay in the absence of the insurance. Therefore, they would only be liable for the co-pays of a managed care plan such as an HMO.
  • Managed care plans such as HMOs cover nothing for non-emergency treatment provided outside their network. As a result, they owe nothing for treatment delivered outside their network.

These rules often make the position of primary or secondary a less important factor in determining payment:

  • Indemnity plan or PPO plan with a Managed Care Plan such as an HMO.
  • The result is the same regardless of which plan is primary. It depends on where treatment was given.
    • Outside the managed care network: The indemnity/PPO plan would make full payment. The managed care coverage would pay nothing.
    • Within the Managed Care network: The managed care coverage would provide the care and the indemnity/PPO plan would pay any co-pays.

Both plans are managed care plans such as HMOs

The key is whether the treatment was provided in or out of one or both networks. If the treatment was provided:

    • A managed care type policy would pay nothing for treatment delivered outside its own network.
    • For treatment provided within both managed care networks, the primary company would provide the treatment. The secondary would pay the co-pay.

Managed care plans do not always treat the issue of duplicate coverage in the same manner as more traditional insurance plans.

Part of this is because many managed care plans are not technically insurance companies so their contracts do not conform to the insurance standard. Some managed care plans totally ignore other insurance; others will attempt to work with them. Either way, there should be little or no impact on you as the patient other than whether your co-pay is reimbursed. Most activity will be between the insurance company and the managed care company.

It would be nice to say that the secondary carrier, even if it's a managed care type company like the first carrier, would at least pay the co-pays of the primary company. However, that is not always the case. Some will, but many won't.

If the co-pays add up, it's worth pushing the secondary carrier to reimburse you.

To obtain direct reimbursement for the co-pays, be sure to get and keep a receipt from the doctor for each co-payment you make at the time of treatment. Don't expect the first carrier to be helpful because they are not really involved in the co-pay process which is between you and your doctor. Often it costs more than the $5 or $10 of the co-pay itself to bill the other carrier for the co-pays. Thus, it is usually left to you to file a claim for reimbursement of the co-pays.

When you have insurance through more than one carrier, it is preferable that you handle the submission of the claims or request reimbursement of the co-pays. If you're not up to it, ask a friend, family member or claims professional to do this for you.

Edited by David M. Morosan