Dental coordination of benefits: which insurance pays first

The short version

• The plan that pays first is the primary plan. The other is the secondary plan. Two plans together don't pay more than 100% of the cost.³
• A patient's own plan (as the employee or policyholder) pays before a plan that covers them as a dependent.²
• For children, the parent whose birthday comes first in the year usually has the primary plan.²
• Some plans use nonduplication. Then the secondary plan may pay little or nothing.¹
• Send the primary plan's EOB with the secondary claim, and wait to post write-offs until both plans pay.¹

Who pays first: the rules in order

The NAIC, the national group of state insurance regulators, wrote a model rule for coordination of benefits (COB) that states can adopt. It covers dental plans as well as medical plans. Your state's version may differ.² Each plan uses the first rule that applies:²

1. Own plan before dependent plan. The plan that covers the person as an employee, member, subscriber, policyholder or retiree is primary. The plan that covers them as a dependent is secondary.² Example: a patient with her own job plan and coverage through her spouse. Her own plan pays first.
2. Children covered by two plans. The birthday rule and the rules for divorced parents apply (see the next section).²
3. Active job before retiree or laid-off plan. A plan that covers someone as an active employee is primary over a plan that covers the same person as a retired or laid-off employee.²
4. Job plan before COBRA. A plan that covers the person as an employee, member, subscriber or retiree (or as that person's dependent) is primary over COBRA or state continuation coverage.² The ADA puts it simply: coverage through a current employer "is primary over a COBRA or a retiree plan."¹
5. Longer coverage first. If none of the rules above settles it, the plan that has covered the person longer is primary.² A change in the plan's insurance company does not restart the clock.¹
6. Still a tie? The plans split the allowed cost equally.²

A few other points from the ADA:

• The ADA notes that generally only group (employer) plans are required to coordinate, so an individual plan may not.¹
• When both a medical plan and a dental plan cover a service, the medical plan is primary.¹
• Medicaid is usually secondary to any other plan.¹

One more NAIC rule: a plan with no COB rules of its own (or rules that don't match the model) is generally treated as primary.²

Children: the birthday rule and divorced parents

Parents who are married or live together. The plan of the parent whose birthday falls earlier in the calendar year is primary.² Only the month and day count, not the year.³ So if one parent was born March 5 and the other March 22, the March 5 parent's plan is primary, no matter who is older. If both parents share a birthday, the plan that has covered a parent longer is primary.²

Parents who are divorced, separated or live apart. A court order comes first. If it says one parent is responsible for the child's health care or coverage, that parent's plan is primary once the plan knows about the order.² If the order makes both parents responsible, or gives joint custody without naming one, use the birthday rule.²

If there is no court order, plans pay in this order:²

1. The plan of the parent the child lives with (the custodial parent)
2. The plan of that parent's spouse
3. The plan of the other parent
4. The plan of the other parent's spouse

The same rules apply when people who aren't the parents, such as grandparents, cover the child on their plans.²

Standard COB vs. nonduplication

Knowing who's primary is half the job. The other half is how much the secondary plan pays. That depends on the type of COB in the secondary plan's contract.

• Standard (traditional) COB. The secondary plan figures what it would have paid on its own, then applies that to what the primary plan left unpaid. The two plans together can pay up to 100% of the allowed cost.²
• Nonduplication. The secondary plan figures what it would have paid as primary and subtracts what the primary paid.³ If the primary paid as much or more, the secondary pays nothing.¹ The ADA says this is typical of self-funded plans, which are mostly governed by federal law (ERISA), not state insurance law.¹

The ADA also describes two other methods, carve-out and maintenance of benefits. Carve-out figures the plan's normal benefit, then subtracts what the primary paid. Maintenance of benefits subtracts the primary's payment from the charge first, then applies the deductible and coinsurance, so the patient is typically left with some cost.¹ The ADA opposes nonduplication, and says California has passed a law against it.¹

A simple example. Made-up numbers: both plans allow $1,000 for a crown, and there's no deductible or yearly maximum in the way. Real claims also depend on each plan's fee schedule and limits.

• Both plans pay 50% for crowns

  Primary pays

  $500

  Secondary, standard COB

  $500 (total $1,000)

  Secondary, nonduplication

  $0 (total $500)

• Primary pays 50%, secondary normally pays 80%

  Primary pays

  $500

  Secondary, standard COB

  $500 (total $1,000)

  Secondary, nonduplication

  $300 (total $800)

In the first case, the secondary plan would have paid $500 on its own. Under nonduplication, the primary already paid $500, so the secondary pays $0. In the second case it would have paid $800, minus $500, so it pays $300. Delta Dental of Illinois gives the same kind of example.³

How to bill the secondary plan

1. Bill the primary plan first. Send each plan a claim with the CDT codes, and send the secondary plan a copy of the primary plan's EOB.¹
2. Bill your full fee. The ADA says to "always submit your full fee on the dental claim form."¹
3. Expect a hold without the EOB. Delta Dental of Illinois, for example, asks for the primary plan's EOB when it's secondary and pays once it gets it.³
4. Check how your software sends it. In Open Dental, the secondary claim waits on hold until the primary is received. With the 5010 electronic claim format, the primary's payment details go to the clearinghouse with the secondary claim. Some clearinghouses also want attachments uploaded first.⁴
5. Post write-offs last. "Write-offs should not be posted until all plans have paid accordingly," the ADA says. Posting a write-off after the primary pays and again after the secondary can wrongly credit the patient's balance.¹ Open Dental's manual says the same, and adds that if only one plan is in network, the write-off goes on that plan's claim.⁴

Common mistakes

• Using the older parent's plan for a child. The birthday rule looks at month and day, not age.³
• Using the birthday rule when there's a court order. For children of divorced or separated parents, a court order that names one parent comes first.²
• Assuming the newest plan is primary. A patient's own job plan beats a spouse's plan, and an active job plan beats COBRA or a retiree plan.¹
• Quoting the patient as if the secondary will cover the rest. Under nonduplication, the secondary may pay nothing.¹
• Sending the secondary claim without the primary EOB. It can stall the claim.³
• Posting the write-off after the first payment. Wait until every plan has paid.¹

Checklist for every dual-coverage patient

1. Ask at check-in whether the patient has a second dental plan, including through a spouse or parent.
2. Note who the subscriber is on each plan and whether the patient is the subscriber or a dependent.
3. For children, note both parents' birthdays (month and day) and whether a court order names one parent.
4. Note whether either plan is COBRA, retiree or individual coverage.
5. Confirm the order by calling the number on the patient's ID card. If it still isn't clear, the ADA says a call to your state insurance commissioner's office can help.¹
6. Ask the secondary plan which COB method it uses: standard or nonduplication.
7. Set the plan order in your software so the primary is plan 1 and the secondary is plan 2.⁴
8. Bill the primary with your full fee. When its EOB comes back, bill the secondary with that EOB.
9. Post the write-off only after both plans have paid.
10. Recheck the order when a patient changes jobs, retires, goes on COBRA or reports a divorce.