In group health care, what is the purpose of the coordination of benefits provision?

The coordination of benefits provision is a key aspect of group health care plans, designed to manage how benefits are distributed among multiple insurance policies. This provision specifies the order in which different insurance policies will pay for a claim when a member is covered by more than one health insurance plan.

When a member has coverage through multiple sources, there must be a clear understanding of which insurer is considered the primary payer and which is the secondary. The primary insurer pays first, covering the expenses according to its benefits, and then the secondary insurer pays any remaining eligible costs up to its limits. This system helps ensure that the total payment does not exceed the actual expenses incurred and prevents the confusion that might arise from overlapping coverage.

This structured approach not only helps in managing claims but also in ensuring that the insured does not receive more than what they are entitled to under their plans, maintaining balance within the health insurance system.