Coordination of Benefits – Understanding Your Dental Benefits
The American Dental Association weighs in on defining the types of COB that affect payment of claims.
Coordination of Benefits takes place when a patient is entitled to benefits from more than one dental plan. The plans will coordinate the benefits to eliminate over insurance or duplication of benefits. When both plans have COB provisions, the plan in which the patient is enrolled as an employee or as the main policyholder is primary. The plan in which the patient is enrolled as a dependent would be secondary. In addition, state laws and regulations often mandate coordination of benefits. Plan sponsors should be certain that the plan they select specifies its method for coordinating benefits with other plans.
Types of COB
Traditional coordination of benefits allows the beneficiary to receive up to 100 percent of expenses from a combination of the primary and secondary plans.
In the case of non-duplication COB, if the primary carrier paid the same or more than what the secondary carrier would have paid if they had been primary, then the secondary carrier is not responsible for any payment at all.
Maintenance of Benefits
Maintenance of benefits (MOB) reduces covered charges by the amount the primary plan has paid, and then applies the plan deductible and co-insurance criteria. Consequently, the plan pays less than it would under a traditional COB arrangement, and the beneficiary is typically left with some cost sharing.
Carve out is a coordination method which first calculates the normal plan benefits that would be paid, then reduces this amount by the amount paid by the primary plan.
Which policy pays first for dependents depends on the rules of the insurance company, or state laws. The typical rules for dependents of parents with overlapping coverage rely on the birthday rule, that is, the parent with the earliest birthday in a calendar year is primary. In the case of divorced/ separated parents, the court’s decree would take precedence.
When Does Secondary Pay?
Usually, the secondary policy will not accept a claim until after the primary claim is paid, and then the secondary policy will often require a copy of that payment information (referred to as an EOB).
More information about coordination of benefits can be received by contacting the ADA’s Dental Benefit Information Service of the Council on Dental Benefit Programs at 800.621.8099.