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Coordination of Benefits

Coordination of benefits (COB) is the process used by insurance companies to determine the order in which multiple plans will pay for the same claim when a person is covered under more than one policy. The goal is to ensure that combined reimbursements do not exceed 100 percent of the eligible expense, while allowing the insured to receive the maximum possible coverage across all plans.

How It Works

Coordination of benefits kicks in whenever more than one benefits plan could pay the same expense, which most often happens when someone has overlapping private coverage such as their own workplace plan, a spouse's workplace plan, or parental coverage for a dependent child. One plan is treated as primary and pays first under its own rules, and the other is secondary and may then consider any eligible unpaid balance under its own rules. Typically the plan under which you are an active employee is primary, while a plan that covers you as a dependent is secondary. For a dependent child covered under both parents' plans, the birthday rule decides the order: the plan of the parent whose birthday, by month and day and ignoring the year, falls earlier in the calendar year pays first. Canadian group insurers generally follow Canadian Life and Health Insurance Association (CLHIA) guidelines to keep this consistent, and under CLHIA Guideline G4 the combined payment from all group plans for a given item cannot exceed 100 percent of the eligible medical or dental expense.

Example:

Picture a Canadian couple who each have a workplace health and dental plan, and their child needs physiotherapy. They submit the claim first to the plan of the parent whose birthday falls earlier in the calendar year, the primary plan, which reimburses according to its own coverage percentage and reasonable-and-customary limits. They then send the remaining eligible balance to the other parent's plan, the secondary plan, which tops up only up to its own rules, so the two plans combined never reimburse more than 100 percent of the eligible expense.

What to Watch For:

Coordination of benefits does not guarantee full reimbursement. If both plans limit the same expense, the claimant may still be left with an out-of-pocket cost, and in some cases the combined payment can be less than the amount submitted. It is also worth remembering that this applies to dental, paramedical, vision, and other benefits, not only drug claims, so the same primary-and-secondary logic and the 100 percent cap follow you across all of these categories.

Related Terms

Spouse / Partner

A spouse or partner is the person legally married to or living in a committed relationship with the insured plan member or policyholder. In insurance terms, a spouse includes both legally married and common-law partners who meet the eligibility requirements defined by the insurer. Common-law partners are generally recognized after living together continuously for a specific period, often 12 months or longer, in a relationship similar to marriage.

Coverage / Benefit

Coverage, sometimes referred to as a benefit, is the range of health or dental services, supplies, or treatments that your insurance plan agrees to pay for under its terms and conditions. Each benefit represents a category of care, such as prescription drugs, dental services, vision care, or paramedical treatments.

Plan Member

A plan member is an individual who is enrolled in and eligible to receive benefits under a group insurance plan. Typically, the plan member is an employee of a company or a member of an organization that sponsors the group policy. The plan member is covered for the benefits outlined in the plan - such as health, dental, life, and disability insurance - and may also extend coverage to eligible dependents, including a spouse or children.

Effective Date

The effective date is the day your insurance coverage officially begins. From this date forward, you are eligible to receive benefits for covered health, dental, life, or disability expenses under the terms of your policy. The effective date is established once your application has been approved, all requirements are met, and the first premium payment has been received, unless otherwise specified in the policy.

Insured Person

An insured person is the individual covered under an insurance policy who is entitled to receive benefits for eligible claims. In a personal policy, the insured person is typically the policyholder who owns the coverage. In a group insurance plan, the insured person is the employee or member enrolled in the plan, and their eligible dependents may also be covered under the same contract.

Relevant Plans

Plans that relate to Coordination of Benefits

Alberta Blue Cross - Blue Assured - Basic

Alberta Blue Cross - Blue Assured - Basic

Can apply at anytime, at any age.

Alberta Blue Cross - Blue Assured - Enhanced

Alberta Blue Cross - Blue Assured - Enhanced

Can apply at anytime, at any age.

Alberta Blue Cross - Blue Assured - Enhanced+

Alberta Blue Cross - Blue Assured - Enhanced+

Can apply at anytime, at any age.

Alberta Blue Cross - Blue Assured - Premium

Alberta Blue Cross - Blue Assured - Premium

Can apply at anytime, at any age.

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