As healthcare costs continue to rise, many employees may start considering whether two insurance plans would help them lower their expenses. In this HR FAQ, Sarah explains how double coverage works.
Yes, you can have two plans under many circumstances:
- The employee is married and covered under their own employer’s sponsored health plan as well as their spouse’s insurance.
- The employee is under 26 years old and covered under their own employer’s sponsored health plan as well as either parent’s insurance.
- The employee is under 26 years old and covered under both of their parents’ separate employer-sponsored health plans as a dependent.
- The employee is over 65 old and covered under their own employer’s sponsored health plan as well as Medicare.
It is called coordination of benefits when two employers work together to pay an employee’s health expenses. If an employee has double coverage, one plan will be their primary coverage and the other will be their secondary coverage. The amount that both health insurance plans pay cannot exceed 100% of the health insurance cost.
Primary Insurance pays first on a particular medical bill, up to the coverage limits.
Secondary Insurance pays the remaining cost – in part or all – of the bill. It’s important to note that even after secondary insurance pays, an individual may still owe remaining out-of-pocket costs.
Which is secondary?
If the employee is covered under a spouse’s insurance as well as their own employer’s sponsored plan, their primary insurance is usually the one offered through their own employer. However, if the employee is a dependent covered under each of their parent’s separate plans, their primary insurance is determined by which parent’s birthday comes first in the calendar year – not necessarily which parent is older.
Questions about double coverage
- Can I choose which insurance provider I use for each doctor visit? No. Once an employee has established their primary and secondary insurance, their primary will always pay first.
- Do I still have to pay two premiums? Yes, employees will still need to pay two premiums and likely still have two deductibles.
- What if I move to a different state? If an employee is covered under two health insurance plans and moves to a different state, their access to providers depends largely on the presence of their insurance plans in that state.