Coordination of Benefits: How Two Plans Work Together in Canada
When your employees are covered by more than one health insurance plan, it's important to understand how these plans coordinate benefits. Here’s a guide on the basics of coordination of benefits in Canada.
Key takeaways
- Coordination of Benefits (COB) ensures that multiple insurance policies don't pay out duplicate claims for the same expense.
- The Canadian Life and Health Insurance Association (CLHIA) sets guidelines for how COB works, but specifics can vary by plan.
- Understanding COB is crucial for efficient benefits planning and cost control.
What Is Coordination of Benefits?
Coordination of benefits (COB) refers to the process where multiple health insurance plans work together to cover an employee's medical expenses. The goal is to prevent duplicate payments and ensure that all eligible costs are covered efficiently.
How Does COB Work?
- First, employees submit claims under their primary plan.
- If the primary plan doesn’t fully cover the expense, any remaining eligible costs can be submitted to a secondary plan for additional coverage.
- The CLHIA has guidelines that help standardize how these plans coordinate benefits.
Who Is Covered by COB?
- Employees who have coverage from more than one source are covered under COB rules. This can include employer-provided plans and individual policies.
- If an employee’s spouse or partner also has coverage, the employee might be eligible to coordinate benefits with their family member's plan.
Coordination of Benefits for Retirees
- COB guidelines typically apply to retirees but may have different rules based on the retiree's overall lifetime maximum.
- If a retiree has an overall lifetime maximum of $100,000 or less, specific COB rules might not apply. It’s important to check your plan details.
Coordination for Out-of-Country Coverage
- For elective health care provided outside Canada, the CLHIA guidelines usually don’t apply.
- However, for emergency healthcare abroad, COB rules may still come into play depending on the specific plan’s terms.
Best Practices for Employers
- Review your group benefits plans to ensure they align with CLHIA guidelines and any other relevant regulations.
- Educate employees about how COB works, so they can make informed decisions when using their coverage.
- Regularly assess and adjust your benefit offerings to stay competitive and cost-effective.
Frequently asked questions
Does coordination of benefits apply if my employee has both employer-provided and individual insurance?
Yes, COB applies when an employee is covered by more than one plan. Both plans will work together to ensure that expenses are covered without duplication.
How do I know which plan pays first in a coordination of benefits scenario?
Typically, the primary plan covers first and then any remaining eligible costs can be submitted to a secondary plan. The specifics depend on your plan’s terms, so it's important to review these documents.
What should I do if my employee has coverage from both their employer and spouse?
If an employee is covered by multiple plans, including one through their spouse, they can coordinate benefits. Claims are usually submitted first under the primary plan and then to any secondary plan for additional coverage.
Are there specific rules for coordination of benefits in Alberta?
While COB guidelines apply across Canada, it's important to check your local regulations and plan specifics. In Alberta, review your carrier’s details or consult with a benefits advisor who understands the provincial nuances.
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