State RegulationsPA specificDifficulty 2/5
A Pennsylvania employee is covered under her employer's group health plan and also as a dependent under her spouse's group plan. What is the purpose of the coordination of benefits provisions that both plans apply?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Coordination of benefits provisions in group health policies exist to prevent overinsurance: when a person is covered under more than one plan, the provisions designate the primary plan, which pays first as if it were the only coverage, and the secondary plan, which pays the remaining allowable amount so total payments do not exceed the loss. The Pennsylvania Insurance Department's group health framework treats COB as a claims-payment mechanism rather than a ban on dual coverage.
Why the other options are wrong
- B) Dual coverage is lawful and common; COB manages its payment consequences rather than prohibiting it.
- C) The secondary plan's obligation is computed under the COB provisions, not a mechanical fifty-fifty split.
- D) Discovery of duplicate group coverage triggers payment-order rules, not conversion of either policy to individual coverage.
Memory hook
COB sorts the order: primary pays first, secondary tops up — never more than the loss.