As health care costs continue to rise, many employees may start considering whether two insurance plans would help them lower their household health care expenses. Double coverage means that employees have to keep up with two different plans and communicate with two different insurance providers. While it’s possible that double coverage could mean less healthcare costs for employees, HR pros need to be prepared to answer their questions.
Of course, you may be wondering if employees can even have two health insurance plans in the first place. In this episode of HR FAQ, I’ll answer that question and explain how double coverage works. Let’s get right to it.
an Employees Have Two Health Insurance Plans?
Yes, individual employees can be covered by two different health insurance plans, but only under the following circumstances:
- The employee is married and covered under their own employer-sponsored health plan as well as their spouse’s.
- The employee is under 26 years old and covered under their own employer-sponsored health plan as well as either parent’s.
- The employee is under 26 years old and covered under both of their parents’ separate employer-sponsored health plans as a dependent.
- The employee is over 65 years old and covered under their own employer-sponsored health plan as well as Medicare.
When two health insurance plan providers work together to pay the claims of one person, it is called Coordination of Benefits, or COB.
How Do Double Coverage and Coordination of Benefits Work?
If an employee has double coverage, one plan will be their primary coverage and the other will be their secondary coverage. The amount that both health insurance plans pay cannot exceed 100% of the health insurance cost.
Here’s a closer look at how primary and secondary insurance break down:
- Primary insurance pays first on a particular medical bill, up to coverage limits.
- Secondary insurance pays the remaining cost, in part or all of the bill.
It’s important to note that even after secondary insurance pays, an individual may still owe remaining out-of-pocket costs.
ow Is It Determined Which Provider Is Primary and Which Is Secondary?
This may lead you to wonder how it’s determined which provider is the primary and which is the secondary. Well, it depends on the situation.
If the employee is covered under a spouse’s insurance as well as their own employer-sponsored plan, their primary insurance is usually the one offered through their own employer.
However, if the employee is a dependent covered under their parents’ separate plans, their primary insurance is determined by which parent’s birthday comes first in the calendar year, not necessarily which parent is older.
hat Else Should HR Pros Know About Double Coverage and COB?
While more specific questions should be directed to employees’ insurance providers, HR pros should keep in mind the answers to these three general questions.
Can I choose which insurance provider I use for each doctor visit? No. Once an employee has established their primary and secondary insurer, their primary will always pay first.
Do I still have to pay two premiums? Yes. Employees will still need to pay two premiums and likely still have two deductibles.
What if I move to a different state? If an employee is covered under two health insurance plans and moves to a different state, their access to providers depends largely on the presence of their insurance plans in that state.
You should remind employees to review the health insurance options available to them, to calculate the cost of double premiums and deductibles, as well as in-network availability, before deciding whether to double their coverage.
Conclusion
That’s it for this HR FAQ. As always, if you have any further questions, feel free to reach out.
Frequently Asked Questions (FAQ)
Can employees have two health insurance plans? Yes, individual employees can be covered by two different health insurance plans, but only under specific circumstances such as being married and covered under both their own and their spouse’s employer-sponsored plan, being under 26 and covered under a parent’s plan, or being over 65 and covered under Medicare in addition to their own employer-sponsored plan.
What is Coordination of Benefits (COB)? When two health insurance plan providers work together to pay the claims of one person, it is called Coordination of Benefits, or COB.
Which plan pays first when an employee has double coverage? The primary insurance pays first on a particular medical bill up to coverage limits. The secondary insurance then pays the remaining cost, in part or all of the bill.
Can an employee choose which insurance provider to use for each doctor visit? No. Once an employee has established their primary and secondary insurer, their primary will always pay first.
Do employees with double coverage still have to pay two premiums? Yes. Employees will still need to pay two premiums and likely still have two deductibles.
How is it determined which plan is primary and which is secondary? It depends on the situation. If covered under a spouse’s plan and their own, the primary is usually the one through their own employer. If a dependent under both parents’ separate plans, the primary is determined by which parent’s birthday comes first in the calendar year, not necessarily which parent is older.
What happens if an employee with double coverage moves to a different state? Their access to providers depends largely on the presence of their insurance plans in that state. Employees should review their health insurance options, calculate the cost of double premiums and deductibles, and check in-network availability before deciding whether to double their coverage.
