Order of COB Processing
The order is set by which plan is the primary payer (pays first), secondary payer (pays the remaining balance, if any, after the primary processes), and, less commonly, tertiary payer (a third plan). The order follows guidelines based on the type of insurance and each plan's rules. The secondary payer may cover costs the primary didn't, depending on COB rules.
COB Order Guidelines
Employer-Sponsored Insurance vs. Other Insurance:
If a person is covered under an employer group health plan (through their own job or a spouse’s job), that insurance is generally considered the primary payer.
If the patient has additional coverage, such as a spouse’s employer-sponsored plan or an individual health insurance policy, the other insurance may be the secondary payer.
Group health plan coverage is the primary payer over a Marketplace coverage option.
Medicare Coordination of Benefits:
Medicare is usually the secondary payer when a person has other primary insurance. However, there are exceptions to that rule. Medicare is the primary payer in the following situations:
The subscriber is retired and the group health plan has less than 20 employees (check the Tax Info on the settings tab to view employee count)
The subscriber is aged 65 or older and has Medicare but no other group health plan coverage.
Note: If the individual is under age 65 and has disability coverage (e.g., the individual is enrolled in Medicare Part A and B because of disability), Medicare will be the secondary payer if the individual has other employer-based group health coverage.
Medicaid Coordination:
Medicaid is always the payer of last resort, meaning it typically pays after all other insurance options have been exhausted.
TRICARE and Veterans’ Benefits:
If a person is covered by TRICARE (military insurance) and has other health insurance, TRICARE will usually be the secondary payer. However, TRICARE may become the primary payer if the patient is actively deployed. Federal law prohibits other insurance from being primary over TRICARE for active duty members.
For active duty members, no COB applies: TRICARE pays first and in full for all covered services (for the member only, not for the full family). Other health insurance cannot be billed for services related to active duty treatment.
Veterans Affairs (VA) benefits are considered a secondary payer unless the treatment is specifically related to a service-connected condition, in which case the VA may become the primary payer.
Marketplace Exchange Coverage:
If someone has access to a group health plan (for example, through their employer or a spouse’s employer), that plan is considered the primary payer.
Marketplace coverage is individual coverage. It is not designed to coordinate benefits with group health insurance.
If a member chooses to also purchase a Marketplace plan, the Marketplace plan would generally pay secondary, but in practice it usually won’t coordinate at all — instead, it will just pay benefits as if it were the only coverage.
No-Fault, Workers' Compensation, and Auto Insurance:
In cases where the injury is due to a work-related incident or auto accident, workers' compensation or auto insurance is generally considered primary.
Health insurance would then pay as the secondary payer once these claims have been processed.
Additional COB Rules
Plan without a COB provision: If a plan has no COB provision, it is primary.
Active vs. retired/laid-off: The plan covering someone as an active employee is primary over the plan covering them as retired or laid-off.
Dependent child: The plan covering the custodial parent is primary, followed by the plan covering the custodial parent's spouse, then the non-custodial parent, and finally the non-custodial parent's spouse.
Birthday Rule: For a child covered by both parents, primary responsibility falls on the parent whose birthday is earlier in the calendar year; the later birthday is secondary. Order is determined by month; if the same month, then by day.
Longer coverage: If both parents have the same birthday, the plan that has covered the parent longer is primary.
Court Decree Exception: If a court decree assigns responsibility for a child's health coverage to one specific parent, that parent's plan is primary — this overrides the custody and birthday rules. The custody order applies only when there is no such decree, or when the decree assigns joint responsibility without naming one parent.
Examples of COB Order in Practice
Example 1: Employee and Spouse with Employer Insurance
Primary Payer: The individual’s own employer-sponsored health insurance.
Secondary Payer: The spouse’s employer-sponsored health insurance.
Example 2: Medicare and Employer Insurance
Primary Payer: Employer group health plan (if the individual is employed or the spouse has employer insurance).
Secondary Payer: Medicare (for someone who is eligible for Medicare and is covered by an employer plan).
Example 3: Medicare and Medicaid
Primary Payer: Medicare (if the individual is eligible for both).
Secondary Payer: Medicaid (after Medicare has processed the claim).
Example 4: Auto Insurance and Health Insurance
Primary Payer: Auto insurance (if the injury is related to an automobile accident).
Secondary Payer: Health insurance (if there is additional coverage).