Issues with Children's Benefits Relating to Secondary Health Insurance
Part 2, Chapter 4: Traditional Individual and Group Plans, Doctors' Bills Page 16
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Once the primary insurer has been determined, the next step is to make certain that you understand the coordination-of-benefits system that your insurer uses to determine secondary benefits. In some insurance policies, the secondary benefits system provides for reimbursement of up to 80% for covered medical expenses. Those benefits, of course, apply only to that portion of the bill for which reimbursement was not provided by the primary insurer.
For example, let's assume that both parents have separate health insurance policies with family coverage, and that both policies pay 80% of all covered major medical claims in terms of both primary and secondary benefits. Assume as well that the family deductible has already been met for the year in both policies, and that the mother's insurance policy is primary for the children, since her birth date comes earlier in the year than the father's.
If the mother files a claim for her child for $100 with her insurer, and if that amount is within the UCR, her policy will provide $80 in reimbursement (80% of $100). If the father's policy pays secondary insurance benefits at the 80% rate, his policy will provide $16 in reimbursement (80% of the remaining $20), leaving a balance of only $4.
However, some insurance policies may include very different rules in relation to coordination-of-benefits. For example, in some cases reimbursement may be provided at the 50%, 60%, or 70% rate, rather than at the 80% rate. In other cases, secondary insurance benefits may apply to children who are covered by their parents' health insurance policies but may not apply to the parents if they are both covered by the same health insurance plan. For that reason, it's important to make certain that you understand your policy's provisions in terms of secondary insurance benefits.
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