[Admin] How does Co-ordination of Benefits (COB) work?
I have seen many claims got rejected because of one simple reason – the COB (co-ordination of benefits) information was wrong.
Although it can be easily corrected, the patient will have to wait for the system to get updated, resubmit the rejected claims manually, and wait again for the claim to get processed before finally getting their reimbursement. It is a long and dreadful process that can be avoided if the COB information on file was correct at the first place.
It seems like the concept of COB often gets misinterpreted. Some people will select the COB option on their enrollment form thinking it gives their spouse and children coverage under their names – it is actually right and wrong at the same time.
If the COB option is selected, the system automatically assumes that both the plan member and the spouse have health insurance. When it comes to a claim, the COB allows the spouse to take the remainder portion that is not covered by the benefit plan of the plan member.
For example, Mr. Lube’s prescription drug is covered at 80%. If he does not have COB with Mrs. Lube, the remainder of 20% will be out of pocket money when he is buying a drug. If Mr. Lube has COB selected, the 20% will be covered by Mrs. Lube’s insurance. It works the same with claims for dependent children – they got submitted to the insurance of the primary plan holder (the parent with an earlier birthdate) and if they are not fully covered, the remainder will be picked up by the other parent’s benefit plan.
COB is a great option that gives alternatives to paying your health claim from your own pocket. But if your spouse does not have insurance and you selected it in error; or if your spouse has lost his/her insurance and you did not update that promptly enough – it denies the claims submitted under your plan for your spouse because he/she is deemed to have his/her own insurance and have to submit to that first. Then you want to turn around and correct the information, but it will most definitely delay the whole claim process.
To avoid having to go through all these, follow a few simple steps in completing the application when you first enrolled into the plan:
1. If your spouse has health insurance but no dental insurance, ONLY select COB for health.
2. If your spouse has dental insurance but no health insurance, ONLY select COB for dental.
3. If your spouse has both, select COB for both.
4. If your spouse’s status changes, inform the plan administrator as soon as possible.