What Is Coordination of Benefits?

Sometimes two insurance plans work together to pay claims for the same person. That process is called coordination of benefits, or COB. Insurance companies coordinate benefits to:

• Avoid duplicate payments by making sure the two health plans don’t pay more than the total amount of the claim
• Establish which health plan is primary and which is secondary — the health plan that pays first and the health plan that pays any remaining balance after your share of the costs is deducted
• Help reduce the cost of insurance premiums
• Reduce your out-of-pocket costs

When one person has two health insurance plans

You have custody of your 8-year-old son. He’s on your health insurance plan and your ex-husband’s health plan. When your son goes to the doctor, we’ll review the claim to figure out which health plan is primary and which is secondary.

That’s coordination of benefits. If you have two health plans, you should fill out the coordination of benefits form.

Health insurance and auto insurance

You hit a deer with your car, hurt your knee and need to go to a doctor. Michigan auto insurance policies must include coverage for car-related injuries, called personal injury protection. But in most cases your health insurance is primary. So your health plan will pay first, and if there are expenses left over not covered by your plan, your auto insurance will pay those.

That’s coordination of benefits, too.

Subrogation

Coordination of benefits also happens when you’re injured and it’s not your fault. Here’s an example.

You’re in a store and slip on a wet floor. You hurt your elbow and need to go to a doctor. Because the accident wasn’t your fault, your health insurance company will contact the store’s insurance company to get them to help pay for your care.

The process of getting the other insurance company to pay is called subrogation. 

If we contact you about coordination of benefits or subrogation

When we send you a form that asks if you have more than one health insurance plan, you should respond, even if the answer is no.

You don’t have to wait for us to contact you. You can:

• Let us know anytime you or anyone on your plan adds or drops other health insurance
• Confirm your existing coordination of benefits information or update it when your plan renews each year; then we won’t mail you a form

If we contact you about subrogation, you should also respond. Learn more about subrogation.