What does coordination of benefits (COB) refer to?

Coordination of benefits (COB) refers to the process of integrating benefits from multiple health insurance plans to ensure that a policyholder receives the maximum coverage available without exceeding the total cost of the covered services. This typically applies to situations where an individual is covered by more than one health insurance policy, such as when both parents have insurance plans that cover their children.

Under COB, the insurers work together to determine which policy pays first (the primary insurer) and which one pays second (the secondary insurer). This process helps to prevent overpayment for health care services and ensures that the insured party gets the full benefit of both policies without duplicating payments for the same service.

Understanding this concept is crucial in navigating health insurance claims, as it can affect out-of-pocket costs and coverage limits. It ensures that individuals are fully supported in managing their healthcare expenses while making sure that insurance companies coordinate their payments efficiently.