Coordination of Benefits (COB)

Coordination of Benefits (COB) is the process that determines how two or more health plans split payment when a member is covered by more than one plan. It prevents members from being paid more than 100 percent of their medical costs. The plan that pays first is the "primary" plan; the one that pays second, covering what's left over up to the secondary plan's limits, is the "secondary" plan.

COB situations are common: a married couple where both spouses have employer coverage and add each other as dependents, a child covered by both parents' plans, someone with Medicare plus an employer plan, or a retiree with both Medicare and a retiree benefit plan. The rules for determining which plan is primary follow standard ordering rules: for active employees, the plan through their own employment is primary; for spouses, each person's own employer plan is primary for themselves; for children covered by two parents' plans, the "birthday rule" applies — the plan of the parent whose birthday falls earlier in the calendar year is primary for the child (this has nothing to do with age). Medicare coordination has its own set of rules depending on employer size and whether the employee is actively working. When both plans use the traditional COB method, the secondary plan may pick up some or all of the primary plan's cost-sharing, potentially leaving the member with little or no out-of-pocket. Some plans use a "non-duplication" COB method where the secondary plan only pays what it would have paid as primary, minus what the primary paid — which can result in no secondary payment if the primary paid more than the secondary would have on its own.

The takeaway: if you or a family member has dual coverage, always submit to the primary plan first and get an EOB before submitting to the secondary. Don't skip the secondary submission — even partial coverage of cost-sharing adds up. And check whether your secondary plan uses traditional or non-duplication COB; it changes what you can expect from the secondary payment.