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.

This process commonly applies when both spouses have separate health or dental insurance, or when a child is covered under plans from both parents. The primary insurer pays first, according to its coverage rules, and the secondary insurer reimburses any remaining eligible amount up to the limit of its own plan. Insurance companies follow standardized coordination rules set by the Canadian Life and Health Insurance Association (CLHIA) to ensure consistency.

Example:

If your dental cleaning costs $200 and your plan covers 80 percent, your insurer reimburses $160. You can then submit the remaining $40 to your spouse’s plan for secondary coverage, which may cover all or part of the balance, depending on its terms.

What to Watch For

Always submit claims to the primary plan first. For adults, the primary plan is the one under which they are the policyholder. For dependent children, the primary plan is determined by the “birthday rule,” meaning the parent whose birthday falls earlier in the calendar year pays first. Keep receipts and explanation of benefits (EOB) statements from the first insurer, as they must be submitted with the secondary claim.