What is Coordination of Benefits?
Coordination of Benefits (COB) is the process of determining which of two or more insurance policies will have the primary responsibility of processing/paying a claim and the extent to which the other policies will contribute. COB is intended to prevent the duplication of benefits when a member is covered by more than one insurance carrier, including other health insurance, retiree benefits, auto insurance, workers compensation, etc.
Order of Benefit Determination
It is necessary to determine which policy has the primary responsibility to pay claims before other coverage is considered for benefit determination. The primary plan must provide its benefits as if the secondary or tertiary plans did not exist. A plan that does not include a COB provision may not take the benefits of another plan into account when determining benefits. The secondary plan may take the benefits of another plan into account only when the correct determination is made that the plan is in fact secondary. Since the order of benefits may differ for individuals within a family, each member must be reviewed individually. If Medicare is one of the plans involved when trying to determine the order of benefits, provider offices should skip forward to the Medicare section. If Medicare is not involved, offices should use the following “order of benefits” rules.
Each plan determines its order of benefits using the first of the following rules that apply:
Declined Medicare Part A, B or both
Medicare Special Circumstances