Questions and Answers
What is the purpose of Coordination of Benefits?
To prevent duplication of benefits and over-insurance when an insured is covered under more than one group plan.
What does the Coordination of Benefits provision limit?
The total amount of coverage paid by all insurers to a patient to no more than the total medical expenses incurred.
What is the difference between a Primary Plan and a Secondary Plan?
The Coordination of Benefits establishes which plan is primary and which is secondary.
In a married couple with both employed, who typically has the primary plan?
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Study Notes
Purpose of Coordination of Benefits
- Prevents duplication of benefits and over-insurance when covered under multiple group plans.
- Applicable only in group health insurance plans.
Application of Coordination of Benefits
- Limits total coverage paid by all insurers to no more than the total medical expenses incurred by the patient.
- Ensures that insurance payouts do not exceed actual medical costs.
Primary Plan vs. Secondary Plan
- Establishes which insurance plan acts as primary (pays first) and which is secondary (pays afterward).
- A clear hierarchy helps streamline the claims process and determine liability for costs.
Medical Expense Claims
- In scenarios where both spouses are employed, the wife’s group plan serves as the primary insurance.
- Claims should first be made on the primary policy up to its limit; any additional expenses can then be claimed on the secondary plan.
- Ensures efficient management of claims and benefits across both insurance policies.
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Description
Explore the essential concepts of Coordination of Benefits in medical insurance through these flashcards. Understand the purpose and application of this important provision found in group health plans. Perfect for anyone looking to enhance their knowledge of medical insurance.
