Make sure you include Dual Insurance coverage – How do you determine which insurance plan is primary – Use the Birthday Rule

Most insurance providers use a “Birthday Rule” as a key metric to efficiently coordinate a child’s benefits. In a case where a child is covered under both parents’ health plans, the birthday rule guides how the coordination of benefits works.

The Birthday Rule is based on the primary coverage from the plan of the parent who has the earliest birthday in the calendar year. The provider then considers the other parent’s health plan to be the secondary coverage.

To ensure that a child’s benefits for ABA services are seamless, it helps to better understand the finer points of the Birthday Rule, when it applies, what parents need to consider, and the potential double coverage for a child.

Insurance Coverage Under Two Plans

A lot of families tend to have a single health insurance policy. Though there are certainly instances where the family might have more than one. This includes a household with two parents whose jobs both offer employer-sponsored health coverage. Especially if the employer-sponsored health plans don’t allow coverage for a spouse. There are also many divorced families where both parents hold health insurance plans that extend benefits to their children.

Anytime both parents have their own health plans, they will also have the option of adding their children to their coverage. This might even be a financial boon if the employer’s insurance covers a significant portion of the monthly premiums.

While this double coverage approach might be a money-saver for the family on paper. Though most families set it up so the secondary plan is usually used to cover expenses that would otherwise end up being charged out-of-pocket costs under the first plan.

What Is Dual Coverage?

In the case of a child needing ABA therapy, dual coverage or a dual-eligibility plan provides the same coverage as Medicare. However, dual coverage Medicare and Medicaid plans might also include extra or enhanced benefits and features. This might include things like dental, vision and hearing coverage, and much more. It may also give you more choice and flexibility.

Coordinating The Benefits Of Two Health Insurance Plans

A lot of insurance companies and self-insured employers use special coordination of benefits to ensure that individuals don’t end up with benefits that exceed the applicable cost of a claim. This basically means that one can’t make money from a medical claim simply by having multiple insurers pay out the benefits.

Coordination of benefits essentially means that a single insurance plan is designated as the child’s primary coverage, while the other is considered to be the secondary policy. This ensures that the primary insurance pays first for any claim made on a child’s behalf, including claims for ABA therapy services.

Once the initial claim has been processed, the secondary insurer’s policy can be applied to pick up any remaining out-of-pocket expenses that might not have been covered by the primary policy. This might include things like the deductible, copay, coinsurance, or costs for specific services that aren’t covered under the primary plan. However, they do need to be covered under the secondary plan.

Just how much the secondary insurer’s policy will pay out will vary depending on what has fully covered under the plan as well as the type of medical claim.

How Medicare & Medicaid Affect Dual Coverage Situations

When you start to factor in dual coverage and enhanced coverage from Medicare and Medicaid, the details that go into coordinating benefits become a little more complicated.

Let’s say that one parent has coverage from their employer and the child is also covered under the other parent’s employer, then the parent whose birthday comes first in the calendar year is considered the primary policy for the child. This is the birthday rule distilled down for two parents who have only private or employer-sponsored health insurance plans with coverage for their children.

Though if your family is receiving health coverage in addition to Medicaid, the other coverage will always be primary. As Medicaid is always considered secondary in any double-coverage situation.

It’s also worth noting that a parent who has Medicare in addition to an employer-sponsored plan, can modify the primary/secondary designation based on the size of the employer. If the parent’s employer has 20+ employees, then the employer’s plan is considered to be the primary plan for the child’s medical insurance coverage. However, if the employer has less than 20 employees, then Medicare is considered to be the child’s primary coverage.

How Long Has The Birthday Rule Been In Effect

The birthday rule was established decades ago by the National Association of Insurance Commissioners. As a result, many states and public health institutions have adopted the birthday rule as a convenient unbiased method for determining which parent carries the primary and secondary coverage for a child.

It is especially important for coordinating the benefits of children with Autism Spectrum Disorder who need ABA therapy to learn new skills and reach increasingly higher milestones. Understanding the benefits and limitations of the primary insurance policy helps families and insurance providers to ensure that the child is getting the best care possible.

By carefully tailoring the secondary policy, the family is less likely to see high out-of-pocket expenses for the ABA therapy their child needs to live their best possible life.

Rare Exceptions To The Birthday Rule

While the birthday rule is considered to be the general standard for coordinating insurance coverage, there are some scenarios where other procedures are followed in determining which policy is primary:

In a rare instance where both parents have the same birthday, the primary plan will be the one that has been in effect the longest. In a scenario where both the parents are divorced and have equal joint custody, the courts or the settlement agreement might have to determine which parent is responsible for providing health coverage for the dependent children.

Should the custodial parent remarry and their new spouse is the one carrying the health insurance policy that the child is under, the new spouse’s coverage becomes secondary. Then the non-custodial parent’s coverage becomes the third priority policy.

In a situation where one of the parents is covered under COBRA or some type of state continuation coverage, yet the other parent has active employee coverage, then the COBRA or state continuation plan will be secondary.