Co-ordination Of Benefits

May 02, 2012
Co-ordination of Benefits is used by the insurance carrier to determine who the first payor will be in the event that an insured person/dependent is covered for similar benefits under another plan.  Benefits payable under the employee’s policy will be reduced, when necessary, so that no more than 100% of eligible expenses are jointly paid by their plan and all plans which come before it in the Order of Benefit Payment.

The Order of Payment is determined by applying standard rules to the various plans which cover eligible expenses.  The rules are applied from first to last until an order is established:

a)     The plan with no co-ordination of benefits provision in the policy is deemed to pay its benefits first (primary carrier).

b)    If all plans have a co-ordination of benefits provision the following rules are applied to determine the Order of Payment and depend on the basis on which the person is covered:

i)     Employee/Member – the plan that covers the person as an employee/member pays its benefits before a plan which covers the employee/member as a dependent.  If the person is an  employee/member under more than one plan the following order applies:

1) The plan where the person is an active full-time employee, then

2) The plan where the person is an active part-time employee, then

3) The plan where the person is a retiree

ii)    Dependent-Spouse: if a dependent spouse is also covered as an employee/member under another plan, the plan which covers the spouse as an employee/member pays it before the plan which  covers the spouse as a dependent.  If the spouse is an employee/member under more than one plan the order of benefit payment is as outlined under “Employee/Member” above.

iii)   Dependent – Child: if a dependent child is covered under more than one plan benefits are to be paid first under the plan of the parent with the earlier birthdates (month/day) in the calendar
year.  If both parents have the same birthdates the plan of the parent whose first name begins with the earlier letter in the alphabet pays first.

If the parents of dependent children are separated or divorced special coordination rules are established.

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