What does Coordination of Benefits (COB) mean?

Coordination of Benefits (COB) refers to the process used to determine how multiple insurance policies work together to cover medical expenses when a patient is enrolled in more than one health insurance plan. This mechanism ensures that when a claim is submitted, the payment responsibilities of each policy are clearly delineated, preventing duplicate payments for the same service. This is especially relevant in situations where an individual may have coverage through an employer and also through a spouse's policy or through government programs.

When COB is applied, insurance companies use specific rules to identify which policy is primary and which is secondary. The primary insurance pays first, up to its limits, and the secondary insurance may pay for some of the remaining costs, dependent on its own policy limits and coverage specifications. This ensures that the patient is not left with an overwhelming financial burden due to having dual coverage.

While comparing different insurance plans and determining premium amounts are important aspects of insurance, they do not directly relate to the COB process. Similarly, reducing policy overlap is less about coordination and more about policy management, and does not encapsulate the core function of coordinating payments between multiple insurers.