Coordination of Benefits
When you have more than one plan.
Coordination of Benefits (COB) is the method we use to determine payment for a claim when there is more than one health plan in your family.
The benefits payable under a primary health plan will be determined without a COB. A COB can apply to a secondary plan and the payable benefits could be reduced in such a way that the total of the payable benefits for all the plans will not exceed 100% of the real costs paid by the insured person.
The “primary” plan refers to the plan that pays for the benefits or first provides services under the Rules of Order for Benefits Determination described further on.
The “ secondary” plan refers to any plan other than the primary plan.
Rules for the Coordination of Benefits
- Any plan that does not have a COB or a similar dispositions will pay their benefits first.
- All the plans that have a COB or a similar disposition will pay for benefits in the order determined by the following rules:
- The plan that covers the person as an employee will be the primary plan; the plan that covers the person as a dependant will be the secondary plan.
- The plan that covers the person as a non-retiree employee, or as the dependant of a non-retiree employee, will be the primary plan.
Note: This rule will not apply if the other plan does not have a disposition regarding retired members.
- For dependant children, the plan that covers the parent whose birth date (including month and day) occurs latter in the calendar year, will be the secondary plan.
Note: If the other plan does not have the birth date rule, then the COB rule of the other plan will apply for the dependant children.
- The following special rules apply if the natural parents of a dependant child divorce or legally separate:
- A court’s ruling establishes financial responsibilities for medical, dental, and other health expenses, the plan that covers the parent awarded these responsibilities will be the primary plan.
- If there is no ruling of the court, the plan that covers the parent who has the children’s custody will be the primary plan.
- If the parent who has the children’s custody remarries, the plan that covers the parent who has the children’s custody continues to be the primary plan. The plan, if any, of the stepfather or stepmother will be the secondary plan, and the plan of the parent who do not have the children’s custody will be the third plan.
- If the rules from (a) to (d) do not establish which plan is the primary plan, the plan that has covered the person for the longest period of time will be the primary plan.
Currently, MCS process payments based on a coordination process in which the insured member always receives 100% of the claim’s cost. This represents 100% of the eligible services, which follows the dispositions of the established rates.
How does this works?
Once the primary health plan is properly determined, the primary plan pays for the services received, without taking into consideration the existence of a secondary health plan.
The secondary health plan will proceed to pay the covered services that the primary health plan did not paid, taking into consideration that the services will be paid according to the provisions and limitations of each policy.
Following, you will find two examples of how does the coordination of benefits works for a family of four:
Example A
Maria and Pedro are married and both work.
Pedro has an MCS health plan provided by his employer.
MCS is
the primary plan.
Plan X is the secondary health plan
However, Maria also has a health plan provided by her employer, and also included Pedro as a dependent.
Plan X is the primary plan
MCS is the
secondary health plan.
Example B
Use the information in Example A as a basis for the following explanation.
Pedro was born in
28th August 1958.
Maria was born in
27th January 1960.
They have two children. Both parents have their children as dependents under their respective health plans.
Nancy, she's 8 years old.
Plán X is the
health plan
primary.
MCS is the
health plan
secondary.
Juan, he's 10 years old
Plan X is the
health plan
primary.
MCS is the
health plan
secondary.
How can you claim your Coordination of Benefits?
Step One:
You must include the payment explanation form that you received from your health plan with the claims form in order to identify the amount the primary health plan paid by for the provided services
Step Two:
Include the original receipts that indicate the difference in copayments and/or coinsurance that you had to paid for the medical services.
Important:
1. Please verify that the services you will received are covered by the other health plan.
2. Determine which plan is the primary health plan and which will be the secondary health plan, since the primary health plan will always paid claims first.
3. Fill out and send the claims form to the plan that will act as the secondary health plan, and include the primary health plan’s payment explanation with the original receipts.
How can you claim your Coordination of Benefits?
1. At 65, Medicare comes into effect
If the insured person is an active employee of 65 years of age or more, or the dependant spouse of 65 years of age or more of an active employee, MCS will coordinate the benefits with Medicare as described in the Coordination of Benefits (COB) section.
However, MCS will always be the primary health plan over Medicare. You can choose Medicare as your primary health plan if you notify your employer of such determination. If you choose Medicare as you primary health plan, your MCS insurance plan will be terminated.
2. At 65, Medicare comes into effect
MCS will continue to pay for the health benefits of an insured person during any waiting period for Medicare benefits to come into effect as a result of a disability or End Stage Renal Disease.
After the waiting period for Medicare benefits ceases, MCS will coordinate the benefits with Medicare as described under the COB. However, the following rules will apply:
- If the employer has less than 100 employees in a typical day of work during the previous calendar year, MCS will be the secondary health plan to Medicare during any period of time in which the person is entitled to receive Medicare benefits as the result of a disability.
- If the employer has 100 employees or more in a typical day of work during the previous calendar year, MCS will be the primary health plan during any period of time in which the person is entitled to receive Medicare benefits as the result of a disability.
