Coordination of Benefits: Can I Have More Than One Benefit Plan?
By: Benefits by Design | Tuesday July 28, 2020Updated : Tuesday September 29, 2020
It is common for employees to be covered by more than one group insurance plan. This is typically achieved through a spouse or common-law partner’s plan.
When an individual is covered by more than one plan, coordination of benefits becomes a requirement to ensure everything runs smoothly between the two plans.
What is Benefits Coordination?
Having two plans often results in overlapping coverage. As a result, the question of which Insurer pays first (known as the first payor) crops up. Extended Health Care (EHC) and Dental Insurance are among the most common coverages that overlap. The coordination of benefits offers a clear framework between the two insurance companies. It indicates who is responsible for paying a claim and in which order.
Benefits Coordination in Action
If Insurer A is the first payor and covers 80% of the claim, Insurer B could cover the other 20%, resulting in full coverage.
How Do I Set Up Benefits Coordination?
When you enroll in a group insurance plan, there will be a section on the enrollment form asking if you have comparable coverage under another plan.
If this is your first and only group benefits plan, this section will not apply. However, if you have existing coverage, you’ll need to carefully consider how you want the two plans to work together, if at all.
In which case, you can choose to either waive coverage or coordinate the benefits.
When you choose to waive coverage, you are indicating that you do not wish to be covered under a benefits plan because you have comparable coverage.
You may choose to waive coverage for yourself and your dependents, or your dependents only. By waiving coverage, you will not pay the premiums for those benefits, but you will be relying only on one insurance plan for coverage.
It is important to note that you must have comparable coverage under another plan to waive a benefit.
When you choose to coordinate benefits, you indicate a desire to be covered by both plans. Like waiving coverage, you can choose to coordinate benefits for yourself and your dependents, or yourself only.
Coordinating your benefits is like having a back-up plan to cover additional expenses not covered by the first plan. This does mean, however, that applicable premiums will be deducted from your pay for both plans.
Benefits Coordination Examples: Who Pays First?
Let’s take a look at a few common examples to see benefits coordination in action.
Who Pays First: My Plan or My Spouse’s Plan?
If you are covered as a member under a plan, that plan will always pay before a plan that covers you as a dependent. You must submit the claim to your own plan first before utilizing dependent coverage.
Who Pays First: My Plan or… My Other Plan?
If you have the same status under more than one plan (i.e. two group benefits plans), the plan that has covered you the longest pays first.
Who Pays First: My Plan or My Kids’ Plan?
Children often gain some form of health or dental coverage through their post-secondary institution or part-time job. These plans will always pay before any plan where a child is covered as a dependent.
Who Pays First: Dependent Children
If both parents have plans and their children are covered as dependents under each, the plan of the parent with the earlier birth date in the calendar year pays first. Unless that dependent child has a plan of their own through a post-secondary institution or part-time job (see above).
What if I Leave my Job or Lose Coverage?
If you leave your job and thereby lose your coverage, you should inform your other Insurer of the change as soon as possible, but certainly within 31 days.
If you inform them within this window, you should be able to re-enroll and restore full coverage without issue. Otherwise, you may be considered a late applicant and be required to submit medical evidence, which can affect your coverage.