Coordination of Benefits (COB)

Coordination of Benefits (COB)

Coordinating benefits with another benefit plan can save you money by increasing your coverage.  Sometimes you may have employees who have coverage under their spouse’s plan as well as their own plan.  Why would anyone want this, especially if you are paying for benefit premiums through payroll deductions?  Well, coordinating benefits with your spouse’s plan when you are paying for that major dental claim may result in your insurance covering 100% of the cost, saving you from paying for huge costs out of your pocket.  You can save that extra money for a rainy day!

So what happens when you have a benefit plan and your spouse does too?  They are very likely to be with two different insurance companies and you can’t just pick the best plan to submit your claims to first.  If one plan has coverage for glasses, and the other doesn’t, unfortunately, you can’t just send your new glasses receipt to the plan that covers vision care.

If an employee is also covered under their spouse’s plan, the employee’s claims are submitted to their own plan first (even if they know they do not have coverage for a specific item or service), and then to their spouse’s plan.  In turn, your spouse’s claims have to be sent into their own plan first, and your plan second.

Let’s say Jennifer has to go to the massage therapist and sends in her $90 RMT claim to her benefit plan for reimbursement.  When the payment comes through, Manulife has only paid her $50.  So she takes that notice from Manulife showing how much they paid and sends it into her husband Stuart’s plan with ClaimSecure, because massage therapy is a covered benefit under his plan as well.  Once the claim is processed, ClaimSecure has paid the remaining $40, and Jennifer happily has 100% reimbursement.

Children are a little more complicated. They could sometimes be covered under two, three, or even four different plans. Let’s say Kevin and Stacy are separated and have a child. Stacy has majority custody. Both Kevin and Stacy remarry. You can now see how the one child could potentially be covered under 4 plans.  In this case, the claim would go through “one household” first and then the other household.  So, a claim for the child would go to Stacy’s plan first, then to Stacy’s spouse’s plan. If the claim is still not paid in full, then it would go to Malcolm’s plan, and finally to Malcolm’s spouse’s plan.

In this scenario, if all four plans had a $500 yearly allotment for physiotherapy, a child could get up to $2,000 worth of coverage for the year if needed.

All in all, coordinating benefits is a good thing!  So if an employee or spouse or children have coverage under multiple plans, they can use all of the plans, and end up paying nothing out of pocket!