Double health insurance coverage, or when an individual is insured through two different healthcare plans, is often created by accident. It can happen if you left one plan before starting a new job and didn’t cancel your previous coverage. The two policies may exist for some time without you realizing that you have double the coverage.
In this post, we find out the following: Can You Be Double Insured For Health Insurance, pros and cons of having two health insurance, primary and secondary insurance rules, and how to determine primary and secondary insurance for child.
Can You Be Double Insured For Health Insurance
Double health insurance coverage exists when a person is insured through two different health insurance plans.
Double coverage can be a good thing. For example, if you have double coverage and go to the hospital, both insurance companies will pay for your medical bills. This is because they are both responsible for covering hospital costs. The health insurance company that paid first will then request reimbursement from the other company.
Double coverage may also be a bad thing, depending on your situation and the type of plan you have selected. For instance, if one of the plans has an annual deductible or pays less than 80 percent of covered expenses after meeting its deductible (for example), then having two plans may not help much because both deductibles must be met before any benefits are paid out by either insurer for any given year where this happens during its respective plan periods (or “open enrollment periods”).
Having double coverage — or “double-dipping” — can have its advantages and disadvantages, and it may be available only in certain circumstances.
It’s possible to be double-insured for health insurance. However, it can have its advantages and disadvantages. In some cases, double coverage may not be an option at all.
While being doubly covered can provide a substantial savings over the course of your lifetime, it also means you’re paying twice as much as everyone else for your medical expenses — which is why this practice has been dubbed “double dipping.”
In some cases, however, having two health insurance policies simultaneously isn’t necessarily a bad thing. For example: You might need temporary replacement coverage after losing your job; if you’ve recently changed jobs and haven’t had time yet to change your health plan through their benefits department; or if you’re transitioning from one employer-based plan into another but have pre-existing conditions that need immediate attention (more on this later). In these situations — where someone needs temporary coverage while waiting on something else — being doubly insured may be an ideal solution.*
How Does Double Coverage Work?
You are double insured if you have more than one health insurance plan. Having multiple policies is a common practice, especially when it comes to dental insurance. A person can have both a dental policy and an individual health plan, or they could just have two separate individual policies. This is a great option for those who are looking to save money on premiums but still want the protection of an additional policy.
Not all health insurance plans allow double coverage.
You should be aware that not all health insurance plans allow double coverage. If you currently have a group policy through your employer, or if you are covered under a parent’s plan (including Medicare), double coverage is not an issue. This is because the Affordable Care Act allows adults to stay on their parents’ insurance until age 26. In these cases, family members can all be covered under the same policy and remain insured at full cost.
However, if you have a high-deductible health insurance plan that requires you to pay out-of-pocket for certain medical expenses until reaching your deductible amount (typically $1,350 per year), then it may pose problems for anyone who also has access to coverage through another source such as Medicare or Medicaid (even though these are government programs). In this case, being insured twice would mean paying higher premiums than necessary since it would result in two claims being filed against one provider each month during which time both insurers will reimburse themselves from corresponding funds while leaving less money available for other monthly expenses like rent or food.”
Is Double Coverage a Problem for You or Your Insurance Company?
Are you wondering whether you can be double insured? It’s a good question, and one that needs to be considered carefully.
If you have two insurance policies, there will be times when the insurance company for one policy might not pay for claims or may limit what they will cover. In addition, if both companies are paying out on a claim at the same time, it could slow down your coverage from both companies.
In general, it’s best to talk with an expert about how having separate health care plans can affect your health care coverage and access to care in order for them to help determine which plan is best for your situation.
Whether your double coverage is a good thing depends on the type of policies you have.
Whether your double coverage is a good thing depends on the type of policies you have. If your employer provides health coverage, then double coverage is a positive thing. It means that if one policy pays for the entire cost of something and another policy partially pays for it, both will cover their respective portions of the cost. If this happens frequently, it could potentially save you money by not having to pay for everything out-of-pocket.
If you have an HMO insurance plan that doesn’t allow people with other insurance plans access to its services (like most Medicaid plans), having another health plan might be problematic because they won’t be able to work together without excluding one or both policies from participating in certain types of care.
If you have multiple policies through different companies or employers over time—or if one person in your household has multiple policies—it’s important to keep track of what each plan covers so there aren’t any unexpected costs when something happens during an emergency situation like needing immediate care at an urgent care center instead of waiting until Monday morning when regular doctors are open again after being closed due holiday weekend hours being shorter than normal ones may seem like just another day off work but actually means missing four days’ worth of paychecks plus overtime hours worked during those two weeks’ worth consideration should always be made before making any decisions about purchasing additional insurance.
pros and cons of having two health insurance
If you have the option to get dual health insurance in Arizona, you may wonder whether you should or not. Read on to learn about the pros and cons.
How Dual Health Insurance Adds Up to More Coverage
With employer-sponsored health insurance coverage and two-income families the norm in America, it isn’t unusual for an employee to have dual health insurance coverage. Referring to the scenario where an employee can receive benefits through their company’s plan as well as their spouse’s (or parent’s) plan, dual health insurance coverage can provide workers with more extensive benefits and reduce their out-of-pocket costs for medical care.
But integrating coverage and paying out claims when two carriers are involved can be tricky. Fortunately, the Arizona system facilitates the coordination of benefits in dual health insurance situations, ensuring that the two health plans complement each other rather than pay out twice for the same claim. Here’s how it works for employees who can leverage the benefits of two group health insurance programs.
Primary Plans and Secondary Plans with Dual Health Insurance
An employee enrolled in their company’s health insurance plan may also be a dependent covered under their spouse’s or parent’s employer-sponsored health plan. In such cases, the insurance carriers involved will designate one of those plans the “primary plan” for the employee while the other is the “secondary plan.”
Generally, an Arizona employee’s plan through their employer will be the primary, while coverage they obtain through their spouse’s plan will be secondary. For a child under age 26 who has coverage under a parent’s plan, that plan usually becomes secondary once their child gets coverage of their own through an employer. For a dependent child who has two plans through their parents, the “birthday rule” typically makes the policy of the older parent the primary and the younger parent’s plan secondary.
Benefits of Dual Health Insurance Coverage
Dual health insurance coverage can be an attractive option for eligible employees because the two plans can be essentially stacked on top of each other to provide more extensive benefits. This is particularly important when major illnesses, catastrophic injuries, or other large claims arise.
In a dual coverage situation, the primary insurer will pay out benefits first. However, those benefits may not, and usually will not, cover all out-of-pocket expenses for a particular procedure, treatment, or hospitalization. In such cases, the secondary coverage would kick in, and the benefits under that plan could make up the difference in whole or in part. Dual coverage can often bring the employee’s costs down to zero for a given claim.
Dual health insurance coverage also provides a backstop for an employee who loses their job. Without dual coverage, unemployed individuals who relied on their old employer for their health insurance could be left without any coverage whatsoever. Even though they could obtain coverage through COBRA or on the Arizona individual and family healthcare marketplace, the cost may be prohibitive or the benefits may be woefully inadequate.
But with dual coverage, that unemployed individuals will still have health insurance coverage and can obtain benefits through their spouse’s or parent’s plan without any interruption in benefits.
Coordinating Dual Health Insurance Coverage
When an Arizona employee has one set of big medical bills and two health insurance carriers that may be on the hook for paying them, those insurers need to work together to sort things out. They do so through a document and process called Coordination of Benefits (COB).
A COB is how insurers allocate coverage between them and designate which plan works as the primary and which as the secondary. The primary plan kicks in first, with the secondary plan picking up any covered costs not paid by the primary insurer.
Potential Downsides of Dual Health Insurance Coverage
Expanded benefits and protection from losing coverage after losing a job are unequivocally positive aspects of dual health insurance coverage. However, like most things in life, those upsides come with some downsides as well. First, with two health insurance plans, the covered individuals pay twice as much in premiums as they would if they opted out of one plan and put all their coverage eggs in the basket of their spouse’s or parent’s plan.
Another challenge with dual health insurance coverage is that the coordination of benefits between two plans and two carriers can be complicated and sometimes messy. Things can get especially messy in situations where one plan is a PPO and the other is an HMO, or where a covered employee may also be eligible for Medicare.
Helping Arizona Companies Get and Keep The Right Coverage
Addressing dual health insurance coverage issues proves just one of the countless ways that Anderson Insurance Services helps employers and workers throughout Arizona with health insurance coverage.
An experienced Arizona group health insurance broker, Anderson Insurance Services remains committed to answering your questions, addressing your concerns, and providing solutions that can keep you and your Arizona workforce safe and healthy during these challenging times. In response to COVID-19, we have ensured that we can handle quotes and enrollment via video conferencing, telephone, and email.
primary and secondary insurance rules
With health expenses going up, many people are asking if it’s possible to have two health insurances and how to make the best use of both plans.
Yes, it is possible for someone to have secondary health insurance and perfectly legal, but it is also important to fully understand how primary vs secondary insurance operates. Even though it may sound like more work having two individual or family health insurance plans, having a second health insurance plan can help you cover some of your insurance expenses.
On the other hand, you might also be responsible for two monthly premiums and two deductibles. Therefore, as you consider getting a second long or short-term health insurance plan, you need to think carefully about what would suit your situation the best. Learn more about health insurance, and decide if having a second health insurance plan is best for your needs.
When would I benefit from having two health insurance plans?
Situations in which one might benefit from having two health insurances
How does having two health insurances work?
Having two health insurance plans does not necessarily mean that you will be fully covered two times. For example, if you go to the doctor’s office twice, this doesn’t mean you are going to get reimbursed twice. Or, if you go to pick up your prescription medication, it doesn’t necessarily mean that you are going to get reimbursed twice for that medication.
Typically, there is a Coordination of Benefits provision that informs your health insurance plans. What this means is that there is an order to which your health insurance policies payout. Insurance companies do not want to incentivize someone to have multiple insurance plans only to get reimbursed multiple times for the same visit. The Coordination of Benefits will specify which plan pays first, reduce the duplication of benefits, and increase the efficiency with which claims are processed.
What is the Coordination of Benefits provision?
This is where primary and secondary insurance comes in:
Note that both the primary and secondary insurance will cover up to plan limits. After the secondary insurance has paid its share, you may be responsible for any remaining amount that wasn’t covered. So, even if you have multiple health insurance policies, you may still have leftover out-of-pocket medical costs.
If you’re concerned about your out-of-pocket costs, taking the time to shop and compare health plans may help. eHealth’s plan finder tool makes it easy to compare plan costs like premiums, deductibles, and copayments side by side.
How do I know which insurance will pay first?
When it comes to primary versus secondary insurance, the question of who pays first depends on the situation.
For example, if you’re a child with two parents who both cover you under their respective family plans, your primary insurance is decided by something called “the birthday rule”. The primary coverage will come from the parent whose birthday comes first in the calendar year. Note that it’s not a matter of which parent is older, but whoever has the earliest birthday.
Whenever you make a health insurance claim, your primary insurance plan will act as if you had no secondary plan and provide you with your benefits. Then your secondary insurance plan kicks in and covers the rest of the cost if it’s covered and necessary.
Will I still have out-of-pocket costs if I have two health plans?
If you have multiple health insurance policies, you’ll have to pay any applicable premiums and deductibles for both plans. Your secondary insurance won’t pay toward your primary’s deductible. You may also owe other cost sharing or out-of-pocket costs, such as copayments or coinsurance.
Even if you have multiple health insurance policies, remember that plan rules still apply. For example, if you’re in a PPO (Preferred Provider Organization) plan, your primary policy may have provider network rules. If you see an out-of-network provider who isn’t covered by your plan, your primary insurance won’t cover the costs – and your secondary insurance won’t cover the costs because you didn’t follow your primary plan’s rules.
As another example, you may have out-of-pocket costs if your provider charges you more than your plan(s) consider reasonable, customary, or allowed under plan rules. If you’d like help understanding different out-of-pocket expenses you may have with more than one plan, an eHealth licensed insurance agent can explain those costs.
Benefits of having two health insurance plans
Is it a good idea for you to have multiple health insurance plans? There are several significant benefits you may enjoy if you have two separate health insurance plans. They include:
Clearly, there are a lot of benefits that come with having two health insurance plans, but you have to find the right plans to complement each other.
Drawbacks of having two health insurance plans
Even though there are a lot of benefits that come with having two health insurance plans, there are a handful of drawbacks as well. Some of the biggest drawbacks of having two health insurance plans include:
Even with two health insurances, the coverage will not exceed 100% of your health costs
For all of these reasons, you need to think carefully before you decide to get a second insurance policy. It is not necessarily the best move for your health coverage, but there are some situations where it can be helpful.
One of the best ways to lower your overall health-care expenses is to compare plan costs and benefits with a licensed insurance broker like eHealth. Since health insurance costs are regulated by law, you’ll get the same price no matter where you buy. So, the best strategy is to shop at a broker like eHealth that offers a large selection of affordable health plans in one place.
If you think you could save money with multiple health insurance plans, think about your current and future medical needs. Then, estimate if the cost of paying two plans’ premiums, deductibles, and more would outweigh the extra coverage of two plans.
Can you have two health insurance plans?: FAQs
Does having two health insurance plans lower out-of-pocket costs?
There are some situations where having two health insurance plans can help you reduce your out-of-pocket expenses. For example, if you have two health insurance plans that cover different areas of your medical needs, then one policy may cover one area while another policy covers the other area. That way, you may reduce your out-of-pocket expenses.
Are there different types of secondary insurance?
Yes, there are different types of secondary insurance coverage. You may want to find a plan that targets the area of your coverage that you require the most. Vision, dental, disability, life insurance, accident insurance, hospital care, and Medicare supplement insurance are just some of the areas that secondary insurance can focus on helping you with in addition to your primary insurance. For example, if your primary plan does not cover a lot of your hospital costs and you think you will be needing hospital care in the future for a major surgery or for an extended period, a secondary hospital care insurance may be right for you. This type of plan may cover you for unexpected illnesses such as a heart attack with a cash payment.
how to determine primary and secondary insurance for child
If a child is covered under both parents’ health plans, a provision known as the “birthday rule” comes into play, guiding how the coordination of benefits will work.
The birthday rule says that primary coverage comes from the plan of the parent whose birthday (month and day only) comes first in the year. The other parent’s health plan then provides secondary coverage.
This article will explain how the birthday rule works, when it applies, and what parents need to take into consideration when deciding whether to maintain double coverage for a child.
Coverage Under Two Plans
Most people tend to have just one health insurance policy. But it’s possible to have more than one, especially if a household has two parents whose jobs both offer employer-sponsored health coverage.
Although there’s usually an option to put the whole family on one policy, that’s not always the best solution. And it’s not always possible, as some employers don’t offer coverage to spouses, particularly if they have an offer of coverage from their own employer.
When each parent has their own health plan, they both have the option of adding their children to their plan. Many families choose to add children to just one parent’s plan, but some choose to add them to both plans, especially if the employers cover a significant portion of the monthly premiums.
This double coverage approach can be a money-saver, as the second plan can be used to cover expenses that would otherwise be out-of-pocket costs under the first plan.
Coordination of Benefits
Insurance companies and self-insured employers use what’s called coordination of benefits to make sure that people don’t end up with benefits that exceed the cost of the claim—in other words, you can’t make money from a medical claim by having multiple insurers pay benefits.
Coordination of benefits means that one insurance plan is designated as the person’s primary coverage and the other is secondary. When there’s a medical claim, the primary insurance pays first, paying benefits as if it’s the person’s only insurance.
Then the secondary insurer steps in and picks up some or all of the remaining out-of-pocket costs that the primary insurance didn’t pay (i.e., the deductible, copay, or coinsurance, or costs for specific services that aren’t covered under the primary plan but that are covered under the secondary plan).
The specifics vary in how much the secondary insurer will pay—it depends on the plan and the medical claim. In some situations, it’s clear which insurance is primary and which is secondary:
The Birthday Rule
The birthday rule applies when a child is covered under both parents’ health plans. Primary coverage comes from the plan of the parent whose birthday (month and day only) comes first in the year, with the other parent’s health plan providing secondary coverage.
Let’s say Abigail and Armando each have their own employer-sponsored health insurance, and they’ve opted to add their children to both plans. Abigail’s birthday is August 20, and Armando’s is November 5.
Since Abigail’s birthday comes first in the year (it doesn’t matter how old they are, as the birth year is irrelevant), her plan will provide primary coverage for the children, and Armando’s will be secondary.
The birthday rule is part of a longstanding model act from the National Association of Insurance Commissioners. States and insurers can use different approaches, but most have adopted the birthday rule as a uniform, unbiased means of determining primary and secondary coverage in situations where a child has coverage under both parents’ plans.
Although the birthday rule is the general standard, there are various situations where other procedures are followed in determining which policy is primary:
If both parents have the same birthday, the primary plan will be the one that has been in effect longer. So in the example above, if Abigail and Armando both had an August 20 birthday, but Armando had been covered under his plan since 2006 while Abigail had only been covered under her plan since 2014, Armando’s plan would be primary.
If the parents are divorced with joint custody and a court has not specified which parent is responsible for providing health coverage for the dependent children, the birthday rule would be used to determine which plan is primary if both parents maintain coverage for the children.
However, it’s common in a divorce for one parent to be responsible for maintaining coverage. In that scenario, that parent’s health plan would be primary, regardless of the parents’ birthdays.
If the custodial parent then remarries and the new spouse has their own health insurance plan to which the child is also added, the new spouse’s coverage becomes secondary, with the non-custodial parent’s acting as a third line of coverage, only covering charges that aren’t paid by the primary or secondary plans.
If one parent is covered under COBRA or state continuation coverage and the other has active employee coverage (and the children are covered under both plans), the COBRA or state continuation plan will be secondary.
If a young adult has coverage under a parent’s plan and a spouse’s plan, the plan covering them for longer will typically be primary. But if the coverage under both plans took effect on the same day, the birthday rule would apply.
The insurers would look at the parent’s birthday (or both parents’ birthdays, if the person has coverage under two parents’ plans in addition to a spouse’s plan) as well as the spouse’s birthday to see which comes first in the year. The policy linked to the person with the earliest birthday would be primary.
Note that if a young adult has coverage under a parent’s health plan as well as their own employer’s plan, their own employer’s plan will be primary, and the birthday rule would not apply.
Automatic Coverage for a New Dependent
Most health insurance policies are required to automatically cover a new dependent (newborn or newly adopted child) initially, but you’ll have to request that the child be added to your policy (within 30 to 60 days, depending on the plan) in order to continue that coverage going forward.
This is part of another model act, although some states have set their own requirements regarding coverage for new dependents.
In situations where each parent has their own health plan, a newborn or newly adopted child may end up in a coordination of benefits scenario, even if the parents don’t intend to maintain more than one policy for the child.
An NPR story about a newborn baby in Kansas is a good example of unexpected coordination of benefits. The parents intended to cover the child under just the mother’s health plan, which offered more robust coverage. But for the first month of the baby’s life, she was automatically covered under both parents’ policies.
Because the father also had his own health plan and his birthday was earlier in the year, the mother’s insurance initially rejected the bills, noting that they should have been sent first to the father’s health insurance.
The situation eventually got resolved, with the mother’s insurance picking up the tab for the bills the father’s plan didn’t pay. But it took the parents more than a year of wrangling with their insurers to get it all sorted out.