Medical Insurance Terminology Have you ever been stumped by the terminology used when speaking of your benefits? What does COB mean? Why is it so important? What is a deductible? What is coinsurance? What is the difference between a copay and coinsurance? Medical insurance can be very confusing when you do not understand what these terms mean.

COB – Coordination of Benefits Coordination of Benefits is a process developed to prevent duplication of payment when more than one insurance carrier covers a person. It limits the total benefits received to no more than the actual amount incurred for care. The most common rule for determining primary and secondary payment is as follows: Your primary insurance is the coverage you select through your own employer while coverage under you spouse’s employer is generally your secondary carrier. (For your spouse it would be the opposite) If children are covered under two plans, the heath insurance of the parent whose birthday falls first in the calendar year is usually considered the primary plan. There are multiple rules in determining primary and secondary payers depending on the situation. If you need help in determining which one applies to your situation, please refer to your medical insurance contract benefit book, see your Human Resource department, or contact PSW Benefit Resources. This is a very important part of your health insurance benefits. Your insurance carrier will generally request COB information from you once a year. The request will be for information regarding you and/or your spouse and/or dependents. When your insurance carrier requests this information from you, it is critical that you respond to their request correctly and promptly. One major reason for delays in claims processing is due to the need for information regarding coordination of benefits. Some insurance carriers will pend and deny claims if the COB information is not received. It is also critical that when there is another insurance carrier, your provider must submit the other insurance payment information (Explanation of Benefits) with the claim. Again, failure to provide this information may cause claims to pend or deny. Deductible/Coinsurance Deductible and Coinsurance usually go hand in hand. The deductible is the amount you must pay toward a claim before your insurance begins to pay. A deductible is generally set on a calendar year basis, meaning it will be required that your deductible be met as of January 1 of each year before any claims will be paid by the insurance carrier. You will usually see that a benefit will be paid at a percentage after the deductible has been met. For example an item might be payable at 90% after the calendar year deductible is met. Your responsibility will be what is left of the calendar year deductible plus 10%. The 10% is considered your coinsurance. Copayment A copayment or copay is a set fee that you must pay for the use of specific medical services covered by the insurance plan. Copayments are generally set for medical office visits, emergency room visits, hospital admissions and prescriptions. The difference between copay and coinsurance is that copay is a set fee and coinsurance is a percentage of the cost.