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COB: What Is It and How Does It work?

Coordination of Benefits

What happens when a patient shows up with dental benefits from multiple insurance plans? How are claims supposed to be filed in such cases? Which insurance company gets billed first? How do they decide on what amount is to be covered? Coordination of benefits or the COB provides a framework that helps answer these questions.

 So, what is coordination of benefits?

COB is a method for insurance companies to coordinate benefits for patients who have insurance coverage through multiple insurance providers. When a patient has dual or even multiple coverage, COB enables them to take advantage of all benefits while helping insurance providers to ensure that their payments do not surpass 100% of the overall cost.

 Coordination of Benefits regulations are intricate, and many practices don’t even take secondary insurance benefits from patients because these rules can create a lot of complications. Understanding the COB rules will enable you to submit accurate claims that will result in higher payouts. With accurate information about COB regulations, you can easily identify which plan is primary or secondary or even tertiary, file insurance claims confidently, and ensure compliance of insurance regulations.

Here are some important COB rules to keep in mind:

 Main Policyholder coverage

This rule is applicable when a patient is enrolled in more than one insurance plan, one as the main policy holder and the other as a dependent. In such cases, the primary plan is the one in which the patient is enrolled as the principal or main policyholder and the patient’s enrollment in the dependent plan would be secondary.

Current employment coverage

This applies to patients who have retired or been laid off. The primary plan would be the one they were covered by before the retirement or layoff, provided their benefits are still in effect at the time of receiving the dental service. This plan would take precedence over any current coverage they may have as an inactive employee. The current coverage would become the secondary insurance provider.

More than One Employer Plan

         When a patient has dental insurance plans from more than one job, the primary plan is the one that has been covering them for the longest. To be precise, the primary insurance is the plan they enrolled in first.

Dependent Children

         This happens when a child is covered by the insurance policies of both of their parents. In such cases, the policy of the parent with the earliest birthdate within a calendar year is considered primary. This is called the ‘birthday rule’. As for parents who are divorced or separated, the court’s decree would take precedence. Which means, the parent with the primary insurance will be the one who has the legal custody of the child.

 In cases where there is no divorce decree, the primary coverage and the responsible parent is decided first by the birthday rule and then the policy which commenced at an earlier date.

 Dental or medical plan

         If the patient has both a dental and a medical plan that offers coverage for a particular procedure, the medical plan will be considered the primary.

 Types of coordination of benefits


         The patient may receive up to 100% of costs under the primary and secondary plans with traditional coordination of benefits.

 Maintenance of Benefits

         Maintenance of benefits (MOB) applies the plan deductible and coinsurance criteria after reducing the covered charges by the amount the primary plan has already paid. Consequently, the beneficiary usually bears some cost sharing, and the plan pays less than it would under a conventional COB arrangement.

 Carve out

         Carve out is a coordinating method which first determines the usual plan benefits that would be paid, then subtracts the amount paid by the primary plan from this total.

Non-duplication COB

         Nonduplication is typically employed in self-funded dental plans. In a non-duplication COB, the secondary carrier is not liable for any payments at all if the primary carrier paid the same as or more than what the secondary carrier would have paid if it had been the primary.  Remember that if the dental insurance plans are not properly coordinated, either your patients or the insurance provider may be forced to pay expenses that they did not have to which can have a negative impact on the overall working of your practice. A lack of coordination in your patient’s plans may block payment of the claim until the COB has been verified.

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