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

Rather, the birthday rule is an informal procedure that the health insurance industry has widely adopted to determine coverage when children are listed as dependents on multiple 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. 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.

Children — and adults — can be covered under more than one health plan. When you're covered under multiple health plans, the plans will have to coordinate your or 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.

Divorced parents often include their children on each health plan in order to maximize their benefits and to ensure children are covered when they're visiting an ex-pouse, especially if the former spouse lives in a different state. (Remember, most HMO doctor networks are only local.) In addition, if each parent has an employer-sponsored group health plan, their children might be listed as dependents on both policies.

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 the parent longer pays 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.
  

  There's also an exception to that custom, though. If a court has issued a divorce decree stipulating that one of the parents is more responsible for the health care expenses of the children than the other parent, regardless of custody, the responsible parent's plan pays first — but the insurer needs to be informed of this arrangement.

• 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 would be considered 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.

• Different plan types. 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.