COORDINATION OF BENEFITS (COB)
COB is a provision in most group plans that requires carriers to share responsibility for paying for health care services that both carriers cover. Using this method, no one pays twice for covering the same medical benefits. If you and your family have more than one health plan, you may be able to save money while improving your coverage.
Often, when a husband and wife are both employed, they may each have health coverage provided by their employers. If you are covered by two plans that include a Coordination of Benefits (COB) provision, you can eliminate most of your out-of-pocket expenses for services now only partially covered by those plans. If you have double coverage, the savings are passed on to you in the form of a benefit reserve account.
COB provides that the carrier with primary responsibility for covering your medical expenses pays first. The secondary carrier pays what is left over as long as it isn't more than that carrier would pay under the terms of its own contract. That's why it is important to know which carrier is primary and which is secondary.
To understand how this benefits works, you must know who is the subscriber of each health plan. The subscriber is the person responsible for payment of dues or an employee for whom dues are paid. If both you and your spouse work, and both of you choose health coverage where you work, then each of you becomes the subscriber for your respective health plan carrier. Each of you, along with any family members covered by the plans, also becomes a dependent of the other's health plan.
The primary carrier is the one selected by the subscriber. If both you and your spouse work and have separate coverage, you each have a primary carrier. For example, if as part of your employee benefits, you select Kaiser Permanente as your health plan, you are the subscriber and Kaiser Permanente is your primary carrier.
If your spouse works for another company and chooses another carrier, that carrier is your spouse's primary carrier because he or she is the subscriber for that health plan. Using the same example, your spouse would be a member of Kaiser Permanente under your plan (as your dependent) but not a subscriber. Kaiser Permanente would be your spouse's secondary carrier. If your spouse has chosen a carrier other than Kaiser Permanente, then that carrier becomes the secondary carrier for you.
If you have children covered by both parents' carriers, the primary carrier for your children will be the one selected by the parent whose birthday (month and day) falls earlier in the calendar year. If you are a single parent or a step-parent, call our Coordination of Benefits Department for the special rules that determine the primary carrier for your children.
Under COB rules, if Kaiser Permanente is the secondary carrier for you or another member of your family, we must keep track of any savings we receive from the primary carrier and credit it into a benefit reserve account for the member who generated the savings. Benefit reserve accounts are applied on an individual basis only. The reserve in your account cannot be used for other family members or for your group.
The money in the benefit reserve account is used to reimburse you for out-of-pocket expenses for medical services that are only partially covered by either one of your health plans. Those expenses and the benefit reserve account must occur in the same calendar year. At the end of that calendar year, the balance in the account returns to zero. Any excess funds are then used by Kaiser Permanente to reduce future rate increases for groups with COB provisions.
To take full advantage of your benefit reserve account, set up a file and keep copies of each family member's bills and receipts for out-of-pocket expenses. You may be asked to forward these copies to us when your benefit reserve account is activated.
If you have questions or need more information, call the Coordination of Benefits Department at (303) 743-5850.
Coordination of Benefits does not apply to certain sickness and accident policies.