Coordination of Benefits (COB)
Coordination of benefits applies to members of your group who are covered by more than one health care plan. Coordination of benefits helps ensure that members covered by more than one plan will receive the benefits they are entitled to while avoiding overpayment by either plan. Coordinating benefits is one of the ways we work to keep premiums at a minimum.
How COB Works
When a member of your group is covered by more than one health plan (for example, when one of your employees is covered under your group plan as well as a spouse’s health plan), one plan is considered to be the primary carrier and the other is considered to be the secondary carrier. The primary carrier covers the major portion of the bill according to plan allowances, and the secondary carrier covers any remaining allowable expenses.
The COB provisions of your policy or plan determine which plan is primary. That plan’s benefits are applied to the claim first. The unpaid balance is usually paid by the secondary plan to the limit of its responsibility. Benefits are thus "coordinated" among all of the health plans, and payments do not exceed 100% of charges for the covered services.
Primary vs. Secondary Carrier
The following rules apply when determining which health plan will be the primary payer:
| Any plan without a COB provision always pays first. |
| If the person receiving benefits is the participant under the contract, that health plan will be primary. The spouse’s health plan will become secondary. |
| If a dependent child is covered under two or more plans, the plan of the member covering the child whose birthday occurs earlier in the calendar year will be primary (known as the birthday rule). If both have the same birthday, the policy that has been in effect longer will be primary. The birthday rule is superseded when a court order or custody rule applies.|
Dependent Coverage When Parents Are Divorced
If the dependent is a child of divorced or separated parents, primary payer status is determined according to the following:
| If the divorce decree places responsibility on one parent, that parent’s health plan is primary. |
| Otherwise, the custodial parent’s plan is primary and the other parent’s health plan becomes secondary. |
| If there is joint custody, the birthday rule applies and the health plan of the parent whose birthday occurs earlier in the calendar year is primary. |
Other COB Issues
Often, some or all of the costs of medical care are the responsibility of an insurance party other than us:
| Members who are injured or become ill as a result of work-related accidents or environment are eligible for benefits under the Workers’ Compensation Law. If Workers’ Compensation denies all or part of a claim, we will review the claim to determine whether to pay benefits as the secondary carrier. |
| We will not pay for benefits if coverage would be available to the member under government programs, with the exception of Medicaid. |
| In certain situations, Medicare may be a participant’s primary or secondary coverage. We will coordinate benefits with Medicare according to the Medicare Secondary Payer rules. |
The Medicare Secondary Payer rules are explained more fully in the Medicare Secondary Payer (MSP) rules section.
How You Can Help With COB Savings
Current, accurate benefit information is essential to making sure the members in your group get the full advantage of their benefits and avoid delays in claims payments. To help coordination of benefits go as smoothly as possible for the members in your group, you can:
| Explain to the members in your group the importance of providing complete COB information on their applications. |
| Let members know they should promptly respond to requests for COB information. |
Updating Members’ COB Information (Anthem HealthKeepers)
Information about other coverage is requested from Anthem HealthKeepers members at the time they enroll, and they should call Member Services to inform us anytime there is a change in other coverage.
Updating Members’ COB Information (Anthem KeyCare and Anthem BlueCare)
To keep our records up to date, we will periodically request information about other coverage from Anthem KeyCare and Anthem BlueCare groups at the following times:
| On an employee’s initial application |
| Once every year. Anthem BlueCare and Anthem KeyCare members are asked to update their COB status annually — to give us the information about any other health care coverage they have, or to tell us that they are not covered under any other health plan. We mail a postcard directly to members and ask for a response by telephone within 10 days of receipt. |
To update COB information, Anthem KeyCare and Anthem BlueCare members can call our automated voice response system at 1-800-510-6824 (available 24 hours a day, 7 days a week). When making this call members will need:
| a touch tone phone |
| their Anthem Blue Cross and Blue Shield identification number |
| information about any other health care coverage they have |
If there is other coverage, the call will be transferred to our Member Services area where the information will be taken by a representative and updated immediately. If members call outside of normal business hours, they will be transferred to voice-mail where they can leave a message. A Member Services representative will call them back during normal business hours to get their COB information and update their file.
If there is no other coverage, members simply indicate that by making the appropriate automated menu selection, and the information is recorded.
When COB information is missing or out of date
If a member has no COB information on file or has not updated the information in the past year, any claims submitted may be denied when first processed. An Explanation of Benefits (EOB) indicating the problem will be sent to the member. The member should call the toll-free number provided on the EOB and update COB information promptly. Once COB information is updated, claims will be reopened and considered for payment.
Medicare Secondary Payer (MSP) Rules
How benefits are paid
Medicare is a nationwide government-sponsored health plan that covers certain medical expenses for persons who are entitled to benefits due to their age or due to disability. Medicare Part A covers certain inpatient medical expenses, and Part B covers certain outpatient medical expenses.
The federal "Medicare Secondary Payer" (MSP) rules require that, for persons covered under both Medicare and a group health plan, Medicare must be the secondary payer in certain situations. This means that the group health plan must not take Medicare entitlement into account when:
| determining whether these individuals are eligible to participate in the plan, or |
| providing benefits under the plan. |
It is very important for your group to understand the MSP rules and how they apply to you. The rules generally apply based on the number of employees, but there are specific rules that determine how employees are counted and during what time period. It is the employer’s responsibility to determine whether its plan is primary to Medicare under the MSP rules, and this is not a determination your insurance carrier or self-funded plan administrator can make on your behalf.
The information in this Administrator’s Guide is very general in nature and it is only intended to describe the basic workings of the MSP rules. The MSP laws and regulations may change from time to time, so it is important for you and your company's legal counsel to review them periodically to ensure compliance.
Additional information about the MSP rules can be found on the Web site of the Centers for Medicare and Medicaid Services (CMS), the federal agency that administers these programs, at http://cms.hhs.gov/medicare/cob/msp/msp_home.asp
Basic Information about the MSP Rules
The MSP rules do not apply to persons who may be covered under your plan as retirees. For other covered employees or dependents who are eligible for Medicare, however, the following MSP rules are applicable.
Employer groups of 20 or more employees
If your company has 20 or more employees, your group health plan must provide the primary coverage for:
| covered active employees who are entitled to Medicare because they are age 65 or older, and |
| covered spouses who are entitled to Medicare because they are age 65 or older, regardless of the age of the covered employee. |
For MSP purposes, a person is considered to:
| "attain" age 65 on the day before his or her 65th birthday, and |
| be "age 65 or older" beginning on the first day of the month in which he or she "attains" age 65. |
For example, a person whose 65th birthday is July 2 is considered to be "age 65 or older" beginning on July 1. A person whose 65th birthday is July 1, however, is considered to be "age 65 or older" beginning on June 1. For these covered persons, your group health plan benefits must be paid before Medicare benefits.*
Groups subject to the MSP rules
For purposes of the MSP rules, an "employer" includes:
| Organizations or individuals (including self-employed persons) carrying on trades or businesses,|
| Entities that are exempt from income tax, such as religious, charitable and educational institutions, and |
| Governments, government agencies, instrumentalities, and political subdivisions, including federal, state and local governments. |
When Medicare is primary despite the MSP rules
In certain situations, Medicare provides the primary coverage notwithstanding the MSP rules. These situations include those in which:
| a Medicare-entitled person refuses coverage under the group health plan;* |
| medical services or supplies are covered by Medicare but are excluded under the group health plan; |
| a Medicare-entitled person has exhausted his or her benefits under the group health plan; |
| a person entitled to Medicare for any reason other than ESRD experiences a COBRA qualifying event and elects COBRA continuation; |
| a person who was on COBRA becomes entitled to Medicare for a reason other than ESRD, and his or her COBRA coverage ends. |
Health care professionals typically work directly with us and Medicare to file claims for Medicare-entitled patients.
When the group health plan is the primary payer, the member's claim is filed with us by the hospital or doctor. After the claim is processed, we send the member an Explanation of Benefits (EOB) outlining the charges that were covered. We also notify the health care professionals of the covered charges. If there are remaining charges covered by Medicare, the health care professional may file a claim with Medicare. If the professional will not do so, the member can file the claim with Medicare. Members may contact their local Social Security office to find out where and how to file claims with the appropriate "Medicare intermediary" (a private insurance company that processes Medicare claims).
When Medicare is the primary payer, the hospital or doctor will first file claims with Medicare. Once Medicare processes the claim, an explanation of Medicare benefits (EOMB) form will be mailed to the patient explaining what charges were covered by Medicare. Then the health care professional will generally file the claim with us. If a professional does not do so, the member may file the claim by sending a copy of the EOMB, together with his or her member identification number, to the address shown on his or her member ID card.
Coverage available to other Medicare-entitled persons
(not available with Anthem HealthKeepers)
We offer a variety of individual Medicare Supplement insurance policies for Medicare-entitled persons who are not eligible for an employer group health plan. These policies, which are purchased by the individual, typically cover part or all of the Medicare Part A and Medicare Part B deductibles and coinsurance amounts. Medicare is the primary payer before Medicare Supplement insurance benefits begin.
If your company provides our group medical insurance to retirees or others who do not have current employee status, Medicare Carve-Out benefits are typically provided. Medicare Carve-Out benefits coordinate with Medicare's benefits such that combined benefits can be made available that are equivalent to the benefits provided to active employees. Medicare is the primary payer. Covered persons must enroll for Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance). If a covered person fails to enroll for Medicare, benefit payments will be reduced by an estimate of the amount Medicare would have paid had he or she enrolled.
* Despite the MSP rules, the law does not force an employee to accept coverage under his or her company's group health plan. If an employee who is entitled to Medicare refuses coverage under your plan, Medicare will be the primary payer. In this situation, your plan is not allowed to provide any benefits to supplement the individual's Medicare benefits.