Health Insurance Birthday Rule
Health Insurance Rules
I heard that if both my wife and I have health insurance that covers our kids, something called "the birthday rule" applies. What does that mean?
Like many dual income couples, you and your spouse have evidently included your kids on each of your group health insurance plans to maximize your benefits. However, without some sort of system in place to help the health insurance companies coordinate benefits, it's possible that either you or your doctor would be reimbursed for more than 100 percent of the actual cost of your claim.
To prevent this, health insurance companies typically designate one parent's health insurance plan as the primary plan and the other as the secondary plan. (That's why the patient questionnaire at your doctor's office asks for information on primary and secondary coverage.) The primary plan is responsible for paying covered expenses up to the limits of the policy. If any unpaid costs are left over, the secondary coverage kicks in.
The birthday rule is often used to determine which plan is primary and which is secondary. Under this rule, the plan of the parent whose birthday occurs first in the calendar year is designated as primary. The date of birth is the determining factor-not the year-so it doesn't matter which spouse is older.
Like most rules, the birthday rule has exceptions:
- If both parents share the same birthday, the parent who has been covered by his or her plan longest provides the primary coverage for the children.
- If one spouse is currently employed and has health insurance through a current employer, and the other spouse has coverage through a former employer (e.g., through COBRA), the plan belonging to the currently employed spouse would be primary.
- In the event of divorce or separation, the plan of the parent with custody generally provides primary coverage. If the custodial parent remarries, the new spouse's coverage becomes secondary. And finally, the non custodial parent's health insurance plan would provide a third layer of insurance protection. This order of payment can be altered by a court-issued divorce decree or by agreement, but the health insurance companies must be notified.
Keep in mind that these practices are common among health insurance companies, but they are not governed by law. Practices may vary from one insurer to another. Read your policy carefully to make sure you understand how your insurance company handles dual coverage. If the policy language is unclear, ask for help from your employer's benefit specialist or your insurer's customer service department.