Sometimes two insurance plans work together to pay claims for the same person. That process is called coordination of benefits. Insurance companies coordinate benefits too:
>> Avoid duplicate payments by making sure the two plans don’t pay more than the total amount of the claim
>> Establish which plan is primary and which plan is secondary—the plan that pays first and the plan that pays any remaining balance after your share of the costs is deducted
>> Help reduce the cost of insurance premiums
When one person has two health insurance plans
You have custody of your 8-year-old son. He’s on your health insurance plan and your ex-husband’s plan. When your son goes to the doctor, we’ll review the claim to figure out which plan is primary and which plan is secondary.
That’s the coordination of benefits.
Health insurance and auto insurance
You hit a deer with your car, hurt your knee, and need to go to a doctor. Auto insurance policies must include coverage for car-related injuries, called personal injury protection. But in most cases your health insurance is primary. So your health plan will pay first, and if there are expenses left over not covered by your plan, your auto insurance will pay those.
That’s the coordination of benefits, too.
Subrogation
Coordination of benefits also happens when you’re injured and it’s not your fault. Here’s an example.
You’re in a store and slip on a wet floor. You hurt your elbow and need to go to a doctor. Because the accident wasn’t your fault, your health insurance company will contact the store’s insurance company to get them to help pay for your care.
The process of getting the other insurance company to pay is called subrogation.
If your insurance contacts you about coordination of benefits(COB) or subrogation
When your insurance sends you a form that asks if you have more than one health insurance plan, you should respond, even if the answer is no.
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