Coordination of Benefits

In cases of double coverage, find out who pays healthcare claims first for a variety of scenarios.

If you or your covered family members have coverage from more than one group health plan, you may be familiar with the term coordination of benefits or COB. If you have more than one group health plan (known as “double coverage”), COB rules determine which group health plan pays first, which pays second and so on.

The Blue Cross and Blue Shield Service Benefit Plan, per our contract with the U.S. Office of Personnel Management (OPM), follows the National Association of Insurance Commissioners (NAIC) rules on which plan pays first when you are covered by two (or more) group health plans. Each double coverage circumstance is applied to one of six NAIC rules in sequential order. Under NAIC, the first rule that fits the double coverage circumstance determines the rule – it is not based on simply choosing one of the six rules.

The most common rules for determining the order of payment are the Non-dependent/Dependent Rule, the Active/Inactive Rule and the Birthday Rule.

Birthday Rule

This rule determines whether a plan is primary or secondary for a dependent child who is covered by both parents' benefit plans and those parents live together. The plan covering the parent whose birthday (month and day only) falls first in a calendar year provides primary coverage for the child. If both parents have the same birthday, then the plan that has been in effect the longest pays as primary.

A different set of rules applies to a dependent child whose parents are divorced or separated or are not living together, whether or not they have ever been married:

  1. If a court decree states that one of the parents is responsible for the child’s healthcare expenses/coverage (“healthcare coverage responsibility”) and the plan covering that parent has actual knowledge of those terms, that plan is primary. If the responsible parent has no coverage for the child’s healthcare expenses, but that parent’s spouse does, that parent’s spouse’s plan is the primary plan.

  2. If a court decree states that both parents are responsible for the child’s healthcare expenses/coverage, the Birthday Rule determines the order of benefits.

  3. If a court decree states that the parents have joint custody without specifying that one parent has healthcare coverage responsibility, the Birthday Rule determines the order of benefits.

  4. If there is no court decree allocating healthcare coverage responsibility for the child, the order of benefits for the child is as follows:
    1. The plan covering the custodial parent;
    2. The plan covering the custodial parent’s spouse;
    3. The plan covering the non-custodial parent; and then
    4. The plan covering the non-custodial parent’s spouse.

Non-dependent/Dependent Rule

The plan that covers an individual as an enrollee or subscriber is the primary payer over a plan that covers an individual as a dependent, for example, as a spouse.

Active/Inactive Rule

The plan that covers an individual as an active employee or as the dependent of an active employee is the primary payer over the plan that covers the individual as a retired or laid off employee or as the dependent of such an employee.

For additional information on NAIC rules regarding the coordination of benefits, visit the NAIC website at www.NAIC.org.