Coordination of Benefits (COB)

To prevent overpayment when an insured is covered by more than one group plan by establishing which plan pays first and limiting total benefits to actual expenses — COB is designed so that when an insured is covered under two or more group health plans, for example through their own job and a spouse's plan, the plans coordinate so that combined benefits do not exceed actual covered expenses. Standard COB rules identify a primary plan, which pays first, and a secondary plan, which pays the remaining covered amounts up to 100 percent of the allowable expense. This prevents duplication of benefits and keeps premiums lower for everyone in the group, because the insurer can price the plan knowing that double recovery is impossible.

National insurance concept

Prevent overpayment by determining which plan pays first and limiting combined benefits to the amount of the actual expense — Coordination of benefits is a contract provision that applies when a person is covered by more than one group health plan. COB establishes an order of payment: a primary plan pays first, and the secondary plan pays remaining covered charges up to its own limits, so the total paid never exceeds the actual expense. The purpose is to prevent duplication and overinsurance while ensuring the insured still receives full reimbursement of covered costs. COB rules also avoid the delay and confusion that would result if each plan demanded that the other pay first. This provision is part of the standard contract-issue content for medical expense plans (AH-III.A.1d).

National insurance concept