Do You Know The Birthday Rule?

by Doug Griffith

The Birthday Rule is an informal procedure used in the health insurance industry to help determine which health plan is considered "primary", when children are listed as dependents on multiple health plans.

This scenario occurs often among divorced parents. The parents include their children on each other’s insurance plan to maximize coverage and to ensure that the child will be covered when visiting the other parent.

The insurance plans need to coordinate benefits so that the claim is paid properly. To prevent overpayment one parent’s plan is designated as the primary plan and the other as a secondary plan. The Birthday Rule determines which plan is primary. It states that the health plan of the parent whose birthday comes first in the calendar year will be considered the primary plan.

Exceptions to the rule include parents that share the same birthday, divorced or separated parents, active employees and different plan types.

When parents have the same birthday, the parent which has had their plan longer pays first.

Where the parents are either divorced or separated, the plan of the parent who has legal custody will be considered primary. If the parent with custody is remarried, the new spouse’s plan would then be considered secondary. The plan of the parent without custody would pay any additional expenses not covered.

If one spouse is currently employed and has insurance and the other spouse has coverage through a former employer (COBRA), the plan of the currently employed spouse would be primary.

Group plans are considered primary over individual plans.

Note: These are generally accepted rules, not laws. Always read your policy to fully understand the procedures your plan has in place.

Contact BusinessPlans today about how we can help save you time, money, and eliminate hassles for your company's benefits.