This is a benefit provision that applies when a person is covered under more than one group health plans. It requires that payment of benefits will be coordinated by all Insurers (group plans) to eliminate duplication of benefits or over payments of services. This is a practice which is used to ensure that insurance claims are not paid multiple times when someone is someone is insured under multiple insurance plans. This arrangement in health insurance is to discourage multiple payments for the same claims under two or more policies.
For example, when husband and wife are working, they might have separate plans (coverage) with their respective employers. In case if a claim arises on any one, the two plans will co–ordinate payments or benefits.
The Primary Payer pays the Normal Benefits (N/B) and the Secondary Payer usually pays less than their Normal benefits .
The rules for determining a Primary or Secondary Payor are:
Employee - primary on his/her plan, secondary on his/her spouse’s plan.
Spouse - primary on his/her plan, secondary on his/her spouse’s plan.
Children – Typically, apply Birth day Rule, unless otherwise stated in the plan.
Birth Day Rule - It is a rule that is applied when dependants are covered under two plans. Amongst the parent, whichever parent was born earlier in a calendar year becomes the Primary Payer, and the other parent pays the claim as the Secondary Payer
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