Health Insurance Rules
Many dual income couples, include their children on each group plan to maximize benfits. However, without some sort of system in place to help the companies coordinate benefits, it’s possible that either you or your doctor would be reimbursed for more than 100 percent of the actual cost of your claim.
To prevent this, companies typically designate one parent’s plan as the primary plan and the other as the secondary plan. (That’s why the patient questionnaire at your doctor’s office asks for information on primary and secondary coverage.) The primary plan is responsible for paying covered expenses up to the limits of the policy. If any unpaid costs are left over, the secondary coverage kicks in.
THE DATE OF BIRTH DETERMINES WHICH PROVIDES COVERAGE
The birthday rule is often used to determine which plan is primary and which is secondary. Under this rule, the plan of the parent whose birthday occurs first in the calendar year is designated as primary. The date of birth is the determining factor not the year so it doesn’t matter which spouse is older.
Like most rules, the birthday rule has exceptions:
- If both parents share the same birthday, the parent who has been covered by his or her plan longest provides the primary coverage for the children.
- If one spouse is currently employed and has through a current employer, and the other spouse has coverage through a former employer, the plan belonging to the curently employed spouse would be primary.
- In the event of divorce or seperation, the plan of the parent with custody generally provides primary coverage. If the custodial parent remarries, the new new spouse’s coverage becomes secondary. And finally, the non custodial parent’s plan would provide a third layer of insurance protection. This order of payment can be altered by a court issued divorce decree or by agreement, but the companies must be notified.
THESE ARE JUST RULES NOT THE LAW
Keep in mind that these practices are common among companies, but they are not governed by law. Practices may vary from one insurer to another. Read your policy carefully to make sure you understand how your insurance company handles dual coverage. If the policy coverage is unclear, ask for help from your employers benefit specialist or your insurer’s customer service department.
Tags: HEALTH INSURANCE
