Coordination of benefits refers to the order in which multiple plans will pay for a covered event.¬† Usually whoever pays first, pays the lion‚Äôs share.¬† That‚Äôs why there is such a to-do about it, nobody wants to be first.
With both parents/spouses working, you can wind up with dual coverage ‚Äď nice problem to have.¬† Some plans will flat out stipulate that if there is another plan, they will pay last.¬† Or for dependant children the order of payment can be determined by going with the eldest parent‚Äôs plan, or by whose birthday occurred first in the calendar year.¬† There are others methods too, the point being there is a sequential order to who pays first, second and third.
Third?¬† Some ancillary accident and excess medical expense plans stipulate they pay last and only the left over ‚Äėup to‚Äô amounts. ¬†It may seem like somehow you got gypped when your $5,000 accident plan only pays $300 ‚Äď but the bill gets paid and that‚Äôs what it‚Äôs there for.
So why is it important to know, ‚Äúwho‚Äôs on first‚ÄĚ?¬† If you go to the hospital, and list the last to pay insurance as the first to pay ‚Ä¶ you can be in for some fun times straightening it all out.¬† It is one headache you can (and which you want) to avoid.¬† And also so you don‚Äôt try to get a last to pay to pick up expenses it won‚Äôt. You'll want to make sure you see a physician in the right network, etc.
If you have the problem of multiple insurance coverage, but don‚Äôt know who pays first, just call your plan(s) and they will tell you.