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Both the insured and insurer share the financial responsibility of health care services covered by a health plan, otherwise known as cost-sharing. The health plan explains exactly who pays for what.
It is the insured's responsibility to understand the benefits of the health plan and how the plan works. Contact the insurer's customer service department if there are questions about the plan's benefits. The insurer’s customer service number can be located on the back of the insurance card.
To better understand the basics of health insurance, review the following example of how an insured would use their health plan:
The insured person gives their insurance card to the provider at the time health care services are received.
The co-payment is paid to the provider at the time health care services are received.
Usually, the provider submits a claim to the health plan to receive payment for the health care services. The insured is responsible for submitting the claim if the provider doesn't do it. This typically occurs if services are received from an out-of-network provider.
The insurer sends an Explanation of Benefits (EOB) to the insured if there is a financial responsibility for the treatment received. The EOB lists the date of service, the amount the provider charged, the amount the insurer will pay for the service(s), and your financial responsibility (deductible, co-payment, co-insurance, non-covered benefit).
The individual is responsible for their portion of the bill when an invoice is received from the provider. It is important to keep a copy of the EOB from the insurer to compare what the EOB says you owe and what the provider is billing you.
If you are covered by two or more comprehensive health insurance policies, you may be familiar with the term coordination of benefits (COB). Comprehensive health insurance was designed to help cover the cost of health care treatment; however, it was never intended to pay more than 100% of that cost. For this reason, COB rules were established to address situations where an individual has more than one health plan and makes sure insurance companies don’t duplicate or pay benefits that exceed 100% of the cost for treatment. For policies issued in Michigan, the COB Act of 1984 specifies how benefits are to be coordinated.
How Does COB Work?
The most common question when there are two or more comprehensive health insurance policies involved is "who pays first?" The COB Act provides guidelines for the general order by which the primary plan, the plan that pays first, and the secondary plan, the plan that pays second, are determined. The primary plan pays its share of the costs first, and then the secondary plan pays up to 100% of the total cost of care. The plans will not duplicate benefits or pay more than 100% of the cost for treatment.
It is important to note that COB rules for an employee/subscriber/member differ from the rules for dependent children.
Specific questions about coordination of benefits may be directed to DIFS at 877-999-6442.
