The Coordination of Benefits (COB) rules allow health plans to coordinate benefits when you are covered by more than on group health plan. COB ensures that the level of payment, when added to the benefits payable under another group plan, will cover up to 100% of the eligible expenses as determined between the carriers but will not exceed the actual cost approved for your care.
How Coordination of Benefits Works
If you are covered by more than one group plan, COB guidelines determine which carrier pays for covered services first.
- The plan that pays first is your primary plan. This plan must provide you with the maximum benefits available to you under the plan.
- The plan that pays second is your secondary plan. This plan provides payments toward the balance of the cost of covered services, up to the total allowable amount determined by the carriers.
Guidelines to Determine Primary and Secondary Plans
The guidelines below apply except for certain situations in which a faculty or staff member has retired or been laid off. Then special rules apply.
- If a group health plan does not have a Coordination of Benefits provision, that plan is primary.
- The plan that covers the patient as the faculty or staff member (member or subscriber) is primary and pays before a plan that covers the patient as a dependent.
- If a child is covered under both parents’ plans, the plan of the parent (or legal guardian) whose birthday is earlier in the year is the primary plan.
- For children of divorced or separated parents, benefits are determined in the following order unless a court order places financial responsibility on one parent:
- plan of the custodial parent;
- plan of the custodial parent's new spouse (if remarried);
- plan of the noncustodial parent;
- plan of the noncustodial parent's new spouse (if remarried).
- If the primary plan cannot be determined by using the guidelines above, then the plan covering the child the longest is primary.
In certain cases, another person, insurance company, or organization may be legally obligated to pay for services that your health plan has paid. When this happens:
- Your right to recover payment from them is transferred to your health plan.
- You are required to do whatever is necessary to help your health plan enforce its right of recovery.
- If you receive money through a lawsuit, settlement, or other means for services paid under your coverage, you must reimburse your health plan. However, this does not apply if the funds you receive are from additional coverage you purchased in your name from another health care company.
Filing COB Claims
Any claims payable to a primary health insurance (not offered by U-M), the university's Worker's Compensation plan, Medicare, or any other public agency are to be submitted first to these groups for payment, then to the U-M health plan. The health plan will coordinate payment with those groups. The amount payable under this plan will take into account any coverage that the faculty or staff member or the dependent has under any other plan. Benefits will be coordinated to provide maximum reimbursement for expenses covered under either plan without providing for duplicate payments.
Coordination of Benefits will be consistent with medical care and insurance industry guiding principles and state laws.
- Always submit claims to your primary plan first.
- Keep copies of all forms and receipts for your own files.
- When you submit claims to your health plan:
- Ask your medical care provider for an itemized receipt or a detailed description of the services, including charges for each service.
- If you made any payments for the service, provide a copy of the receipt you received from the provider.
- Follow the filing instructions provided by your benefit plan.
Right to Receive and Release Needed Information
It may be necessary for information to be obtained or released in order to coordinate benefit payments with other plans. Any person claiming benefits must furnish any information needed to coordinate benefit payments.
Right to Recovery
Health care and insurance plans generally have the right to recoup any excess amount that may have been paid over that called for by their plan -- from the person for whom the payments were made, or from any insurance company or organization.
Coordination of Benefits with Michigan No-Fault Auto Insurance
The University of Michigan sponsored group health plans coordinate benefits under the state of Michigan's coordination of benefits law, including the no-fault law, and other applicable laws.
The basic no-fault auto policy has three parts: Personal Injury Protection (PIP); Property Protection Insurance (PPI) and Residual bodily injury and property damage liability. The PIP portion of your no-fault policy pays for medical costs if you are hurt in a car accident. There are two types of PIP medical coverage: “excess or coordinated coverage” versus “primary or uncoordinated coverage.” How your health plan coordinates with your no-fault policy will depend on whether you are an employee or retiree and whether you are covered under a university self-insured plan or an insured HMO plan as described below.
Coordination with Self-Insured BCBSM and BCN Plans
The university’s self-insured non-ERISA plans include those administered by BCBSM (which includes BCBSM Community Blue PPO and CMM) and BCN (which includes GradCare and U-M Premier Care). These health plans will assume primary liability to provide benefits available under your university plan in accordance with the benefit plan's terms and conditions regardless if you have purchased a coordinated or uncoordinated no-fault automobile policy.
For retirees or disabled employees whose Medicare coverage is primary to their university self-insured BCBSM or BCN group plan, the same rules for priority of payment apply. In other words, benefits under the university’s BCBSM or BCN plan will pay as primary (first) before the retiree’s no-fault automobile policy regardless if you have purchased a coordinated or uncoordinated no-fault automobile policy. After the university plan has made payment in accordance with the retiree’s benefit plan and the no fault plan has made payment; Medicare will pay as the third carrier for any unpaid charges, if any, in accordance with their terms and conditions for covered services.
Coordination with Insured HAP HMO
Benefits under the HAP HMO plan also will not be reduced because of the existence of coordinated PIP coverage under an active employee’s no-fault automobile policy. However for active employees with coverage through a non-coordinated no-fault policy, HAP HMO plan will not assume primary liability. In the event payment is made in error, claims are subject to recovery.
For retirees, HAP is required to uphold their position as secondary to Medicare and will only pay after Medicare has made their payment. This is different than as described above under the BCBSM and BCN plans. Because Medicare benefits are not payable for any expense that is covered under the no-fault plan, Medicare will look to the no-fault plan to pay first. Under this scenario, the no-fault auto insurance pays first, Medicare pays second, and HAP pays third. Individuals whose Medicare coverage is primary to their HAP HMO plan should consult with their no-fault insurance agent to ensure they have adequate primary or uncoordinated PIP coverage in force.
Please consult with your automobile insurance carrier if you have any questions about the terms of your no-fault policy. The university is unable to answer or respond to any questions you may have regarding your no-fault automobile policy.
If your no-fault insurance carrier requests or requires confirmation of your university health plan’s position for coordination with no fault, please call the SSC Contact Center at 734-615-2000 or 1-866-647-7657 (toll free). Representatives are available 8:00 a.m. to 5:00 p.m., Monday through Friday.