What is coordination of benefits?

We get it, coordination of benefits sounds like more boring/vague insurance industry jargon. Yawn. We'll try to keep it simple and to the point here. This article is intended to serve as a reference guide as to how to navigate different scenarios and coordinate benefits correctly.

Coordination of benefits is a provision that is typically included in health insurance plans in Canada that is designed to ensure that an individual doesn’t claim the same medical expense in duplicate. The most you can be reimbursed for is 100% of a given expense. This is especially important when an individual has multiple health insurance policies or is covered under more than one plan, such as through an employer and a spouse's employer.

It's just a set of rules

The coordination of benefits provision is basically a set of consistent rules that allow the insurance companies to determine which policy should be responsible for paying the medical claim, and in what order, based on the terms and conditions of each policy.

This helps to ensure that the individual receives the maximum benefit available under their insurance coverage, without being reimbursed more than the actual cost of the medical expenses (I.e. more than 100%).

As a general rule of thumb, you should submit claims to your own plan first, and any other plan second – but depending on your unique personal circumstances it can sometimes get a bit more complicated.

What does coordination of benefits mean?

In short, when someone is covered by more than one benefits plan, the plans work together to pay any claims.

How does coordination of benefits work?

There are three common scenarios where coordination of benefits comes into play. In each case, one plan pays first (the primary payor) and one plan pays second (the secondary payor).

Scenario 1:

You're covered under your employer’s benefits plan and as a dependent under your partner’s plan.

Scenario 2:

Your partner is covered under their employer’s benefits plan and as a dependent under your plan.

Scenario 3:

Your dependent kid(s) has coverage under both you and your partner’s benefits plans.

How do you determine which plan pays first?

Look for your scenario below and then submit your claims in the order shown. Send your claim to the first plan on the list. After your claim has been processed, if there are any unpaid amounts, submit a claim to the next plan on the list.

When submitting unpaid amounts to a second plan, you will need your Statement of Claim provided by the first plan.

I’m married (or living common-law) and we each have a workplace benefits plan

1. Your own benefits plan.
2. Your spouse’s plan.

Likewise, your spouse’s claims should be submitted to their own plan first.

I’m married (or living common-law) and we’re submitting a claim for our dependent child

1. Plan of the parent whose birthday (month and day) falls earlier in the calendar year (ignore the year of birth and just look at month and day).
2. Other parent’s plan.

I have joint custody of my dependent children. My ex and I are each remarried or living common-law.

1. Plan of parent whose birthday come first in the calendar year (ignore the year of birth and just look at month and day).
2. Plan of the second parent.
3. Plan of the spouse of the parent whose birthday comes first.
4. Plan of the spouse of the second parent.

I have sole custody of my dependent children. My ex and I are each remarried or living common-law.

1. Plan of the parent with sole custody.
2. Plan of the spouse of the parent with sole custody.
3. Plan of the second parent.
4. Plan of the spouse of the second parent.

I’m a full-time university student with coverage through my university and through my job, but am also considered a dependent under my parent’s plan.

1. Your student or work plan, whichever one you got coverage with first.
2. Your student or work plan, whichever one you got coverage with second.
3. Your parent’s plan.

Exception: If the student is a Quebec resident, and is submitting a drug claim, submit to the student plan last.

I have 2 jobs and have coverage with both

1. Plan of the full-time job.
2. Plan of the part-time job.

Note: If you work the same hours at both jobs or have 2 part-time jobs, submit to the plan of the job where you started working first.

I have a retiree plan and a plan at my new job

1. Plan of your new job.
2. Retiree plan.

Statement of claim

This is sometimes also referred to as an explanation of benefits, or a statement of benefits.

These are paper statements - essentially like a receipt showing the breakdown of what items were claimed/submitted for reimbursement, and how much (in dollars) of each item the insurance will pay for. It will also show the total amount (in dollars) that is being reimbursed collectively.

Copies of these statements can be obtained from within your online claims portal once your claim has been processed.

If you're receiving your claim reimbursements as a physical cheque in the mail, the cheque will usually be accompanied by a paper copy of your Statement of Claim. If you're receiving your claim reimbursements as direct deposit to your bank account, log in to your online claim portal to obtain a copy of the statement.

These statements are useful for submitting claims to any additional plan(s) you may be covered by as it shows the second insurance company exactly what was previously reimbursed, so that they can reimburse the difference (up to the limits of their plan).

How are coordination of benefits claims reimbursed?

Submit your claim to your benefits plan first, for payment according to your coverage.

Once you receive your Statement of Claim (see above) for that initial claim, you can subsequently submit another claim for the remaining amount to the second plan and it will be reimbursed according to the coverage of that plan.

The reimbursement under both plans won’t be more than 100% of the original claim amount.

Next steps

Aeva was designed to help make the process of selecting a health care plan as easy as possible, by asking you a few simple questions and presenting you with a curated list of choices from Canada's top insurance companies.

Prefer a human touch? You can also always chat/email/or speak with an Aeva advisor who will be happy to assist you with selecting a plan that's right for you and your family.

Give us a try at https://aeva.ca

Thanks for reading!