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"Birthday rule" determines health insurance coverage

Your health plan's "birthday rule" does not mean that it will throw a party for you each year.

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Rather, the birthday rule is an informal procedure that the health insurance industry has widely adopted for the coordination of benefits when children are listed as dependents on two parents' group health plans.

Under the birthday rule, the health plan of the parent whose birthday comes first in the calendar year is designated as the primary plan, according to the National Association of Insurance Commissioners. Note that it doesn't matter which parent is older, because the year of birth is not a factor. Thus, if your birthday is July 15, 1955, and your spouse's is Sept. 17, 1953, your health plan would be considered primary because your birthday comes first in the calendar year.

Key points

  • Having dual coverage can maximize your children's benefits.
  • You can't be reimbursed for more than the value of your bills.
  • Age is not the issue; date of birth is.

Children — and adults — can be covered under more than one health plan. When you're covered under multiple health insurance plans, the plans will have to coordinate you and your children's benefits. This is one of the reasons a health plan wants to know if you or your spouse has other coverage; it's not just being curious.

The plans need to coordinate benefits to make sure that neither you nor your doctor is reimbursed for more than 100 percent of the actual cost of your medical claim. They don't want you pocketing their money.

To prevent those kinds of payment problems, when children are covered under each parent's group health plan, one plan is designated as "primary" and the other "secondary." The plan that is primary pays the claims first. The secondary plan pays any remaining costs not covered by the primary plan — but only if the medical care is a "covered benefit" under the secondary plan; it won't reimburse you for services it doesn't cover.

Maximizing benefits

Divorced parents often list their children on each health plan in order to maximize their benefits and to ensure children are covered when they're visiting an ex-spouse, especially if the former spouse lives in a different state. (Remember, most HMO doctor networks are only local.)

Exceptions to the rule

Now for some exceptions. And, some in some cases, this gets a bit complicated.

  • Same birthdays. If both parents happen to have the same birthday, the plan that has covered a parent longer pays first.
  • The Employee Retirement Income Security Act of 1974 (ERISA), designates that the birthday rule can be applied to determine which plan is the primary health plan for the children of working parents, according to the child support guidelines from the Center for Policy Research. While the parent whose birthday comes first is still the primary insurance plan, the birthday rule does not apply to children whose parents have divorced, or are members of a blended family. A court order about children's health coverage after a divorce supersedes the birthday rule. If children live with a custodial parent and step parent, the custodial parent provides the primary insurance plan, regardless of whether the step parent's birthday comes first.
  • Divorce or separation. When two or more plans cover your children as dependents when you're divorced or separated, the plan of the parent who has custody pays first. The plan of the new spouse of the parent with custody pays second. And finally, the plan of the parent who doesn't have custody pays last.
  • Active employees. If you are currently employed and have health insurance through your employer, and your spouse has coverage through a former employer (such as COBRA), and your children are listed as dependents on both plans, your plan is primary.
  • None of the above. When none of these rules determines the issue, the plan of the parent who has been covered longer is designated as primary.
  • Group health and individual health plans. If you and your ex-spouse have different types of health plans, the rules are also different. If you have a group health plan and your former spouse has an individual plan, the group plan pays first, regardless of the birthday rule.

Word of warning

Remember, the "birthday rule" and its exceptions are not insurance laws; rather they are common claims practice, and not all plans follow these customs. Thus, you should read your policy or membership agreement to see what procedure your health insurer has in place. If you're still uncertain, contact your plan's customer-service department. And make sure you know the payment procedure before you or your children visit the doctor, or you may find yourself personally responsible for some unexpected medical bills.

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