What do you do with health insurance when both spouses work?
“To sum it up…”
- No matter how many health policies you may have, your benefit will never exceed 100 percent of the cost
- All health insurance policies are not created equal, thus benefits may be impacted
- By having each spouse covered by a separate policy, virtually continuous coverage is assured
Getting married comes with a lot of logistics that aren’t usually considered when planning a wedding. However, after the “I Dos” have been exchanged, you have to take a look at your insurance policies in order to determine what type of coverage your new family unit needs, as well as how it should be purchased and whose name should go where.
The following was prepared by SelectHealth and offers a detailed explanation regarding the coordination of benefits:
“Coordination of Benefits (COB) is the process of determining which of two or more insurance policies will have the primary responsibility of processing/paying a claim and the extent to which the other policies will contribute. COB is intended to prevent the duplication of benefits when a member is covered by more than one insurance carrier, including other health insurance, retiree benefits, auto insurance, workers compensation, etc.”
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Understanding Coordination of Benefits
When the possibility of being covered by two health insurance policies is available, the basic decision that has to be made as to whether it is necessary for a married couple to have two separate policies.
Factors to Consider
• How much of the premium will the insured people have to pay for the policies? The employer may pay a significant portion or very little. The spouses have to decide which fits their budget.
• If both husband and wife keep the coverage, the procedures outlined in the policies for determining which policy provides primary coverage and which provides secondary.
• Determining the benefits that will be available to the couple’s children and how long the children can be claimed as dependents is something requiring careful attention.
Examining the Policies
Understanding which policy offers the best benefits. All health insurance policy are not created equal. Determining which policy is the primary policy and which will serve as the secondary policy is very important.
This may be spelled out in the policy or it may be necessary to contact the insurance provider. However, there are some basic points to remember:
• Just because you have two policies, the benefit will never exceed 100 percent of the cost.
• Finally, it is important to examine the benefits, deductibles, and other similar factors to determine which policy is best for the family.
Because both spouses have insurance coverage, they may face a situation where only one or neither spouse has coverage.
This would be dependent on the long-term security of your employment and a decision by the employer to stop subsidizing insurance as a benefit.
Steps to Follow If Insurance Coverage is Halted
If one of the policies is eliminated or if a husband or wife becomes unemployed, either by choice or by company downsizing, the family will be dependent on the remaining policy.
In such a case, it may be possible to obtain coverage through the Coordination of Benefits Act (COBA). This would allow the purchase of the same policy for up to 18 months. However, the employer would not be paying any of the cost and the entire burden would be up to the affected member of the couple.
Depending on the coverage offered by the remaining policy it may be wise to pursue insurance under the Affordable Care Act (Obamacare). No one can be turned down and depending on the couple’s total income, federal assistance may be possible.
Finally, depending on the financial situation, a person may be eligible to receive Medicaid coverage. As a primary policy, Medicaid will not cover all expenses and many physicians will not accept it as primary coverage.
However, for persons on Medicare, and who meet the requirements for Medicaid, then the need for a supplemental policy may be eliminated.
Things to Remember
Assuming that none of the previously mentioned scenarios occur, the couple still has to make some decisions and should ask themselves the following questions:
• Does the promise of 100 percent coverage through the coordination of benefits clause of the two policies justify the paying off two separate premiums?
• Is it more practical to pay for one policy that will provide 80 percent coverage and possibly100 percent, after an out-of-pocket threshold is met? Examine both policies and find out if either or both will start paying 100 percent coverage after a stated out-of-pocket expense are paid.
The previously mentions warnings regarding possible courses of action may seem complicated, but it is necessary to determine if one of the spouses has to stop working and understanding that under no conditions will more than 100 percent of the bill will be paid. Because of certain provisions in various policies, the 100 percent mark may not be reached.
It is prudent to decide it both policies provide the needed coverage and determine if the cost of two policies provides a needed safeguard or only provide a redundancy of coverage.
Actually, everyone is required to have health insurance or pay a penalty to the federal government. It is up to the consumer to select the best policy for the individual, couple or family.
Thus, while it is important to have health insurance, it is equally important to have the right insurance and not excessive insurance.
Remember, under the best case, a couple with two policies will at best get 100 percent coverage for each claim and possibly something less than 100 percent.
Examining the Situation
The actual model for a coordination of benefits plan can be lengthy and provide very detailed points. Those wishing to know more about the precise steps in a coordination plan should view the following Coordination of Benefits prepared by the National Association of Insurance Commissioners.
Finally, there is one other situation to consider. Persons receiving Medicare benefits, but have an additional health care policy have to determine if the out-of-pocket month cost is worth the increased benefits.
There are numerous situations that are applicable to persons receiving health care coverage through Medicare. A complete explanation of the various circumstances regarding the Coordination of Benefits with Medicare can be found at the Centers for Medicare and Medicaid Services.
This may all sound a bit dry and difficult to grasp, but we can make your search for affordable couple’s healthcare easier. Simply enter your zip code into the box below and you’ll receive personalized quotes from some of the nation’s best providers today!