Coordination of benefits is the process of submitting claims to both health and dental plans when both spouses have, and participate, in the benefits plan offered through their employer.
How Does Coordination of Benefits Work?
Coordination of benefits works a little differently for the spouses than it does for the kids. Firstly, for each spouse, their claims will be run through their own benefits plan first. Whatever is remaining can then be submitted to their spouse’s plan (within the limits of their coverage). When it comes to the kids, it comes down to the parent’s birthdays. Whichever falls first in the calendar year will be the plan that becomes the first payor for claims pertaining to the kids. Like the parents, any unpaid balance would be submitted to the second plan.
Fun fact: if both parents have the same birthday, they will look at who’s name comes first alphabetically.
Considerations for Coordination of Benefits
Both spouses having health and dental plans will always add up to more comprehensive coverage for the family as a whole. In certain scenarios, it may be worth reviewing the coverage of both plans and opting out of health and dental coverage for whichever spouse has less robust coverage. This decision should not be taken lightly though as once you leave the plan, it can be hard to join again. Why would you opt out of one plan? If one spouse has ample plan coverage, you may not need the second plan. Also, it can be a cost saving measure if you are paying a share of your benefits via payroll deductions. In this case, if you aren’t using the benefits, it might be in your best interest to opt out of the coverage and redirect that money to another area (maybe an RRSP contribution or other form of savings). Ultimately, this comes down to evaluating your family’s needs and taking into account future unknowns.
As always, we’re here to help you navigate your benefits plan and are available to answer any questions.