How to Coordinate Primary & Secondary Health Insurance

A secondary policy may cover expenses not paid by your primary plan.
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If you're covered by more than one group health insurance plan, it is important to know which policy is primary. Not understanding how to coordinate health insurance benefits, or failing to make sure all medical expenses are properly submitted, may mean more out-of-pocket costs to the beneficiary.

Primary and Secondary Plans

A primary health insurance plan is the first plan billed for medical expenses. The plan must make the insurance payments to the medical provider, or reimburse the policyholder for expenses paid, per the terms of the contract. A typical situation for having both primary and secondary insurance is when the insured is married and is also covered under the spouse’s health insurance plan. Secondary plans are used after all payments have been made by the primary plan.

Determining the Primary Plan

There are several methods for determining which is the primary plan. One way is the plan that the beneficiary has had the longest is the primary plan. Another method is determining whether you are covered as part of an employer’s plan versus a plan where you are covered because you are a dependent. In this circumstance, your employer’s plan would be the primary plan. The specific plan contracts may also state whether you may use the plan for primary or secondary coverage.

Coordinating Plans

Once you determine which plan is primary, submit all insurance claims to that company. The primary plan will pay the covered medical expenses. When all claims are settled with the primary company, if you still have out-of-pocket expenses, file a claim with the secondary company. Depending on its coverage, the secondary company will pay the remaining out-of-pocket costs.

Buying a Secondary Plan

When buying a secondary plan, carefully read the contract to confirm that you are not paying for coverage you already have in your primary plan. For instance, an employee who has coverage through her place of employment may be able to add her spouse to the plan. If her husband already has excellent health insurance coverage at his place of employment, this may not be a wise financial move. On the other hand, if she has excellent coverage, while her husband’s coverage has high deductibles, it may be a good financial move to add her husband to her plan if the secondary coverage will reimburse for her husband’s high deductible out-of-pocket expenses.

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