The Birthday Rule Insurance Explained in Simple English

If you have ever tried to choose between two insurance policies, you might have heard of the birthday rule insurance. It is a method used to decide which plan will be the primary one for someone who is covered under two insurance policies. In this article, we will explain what the birthday rule insurance is, how it works, and answer some frequently asked questions.

What is the Birthday Rule Insurance?

The birthday rule insurance is a coordination of benefits method used by insurance companies to determine which health insurance plan is the primary one for a dependent child who is covered by two parents’ health plans. It is called the “birthday rule” because it uses the birth dates of the parents to decide which plan is the primary one.

Under the birthday rule insurance, the plan of the parent whose birthday comes first in the calendar year is considered the primary insurance plan for the dependent child. If the parents have the same birth date, then the plan that has covered the parent for the longest time is selected as the primary plan.

The primary insurance plan will be responsible for paying the claims related to the dependent child’s medical expenses first, up to the limits of the plan. The secondary plan will then cover the remaining costs, as long as it is still within its coverage limits.

How Does the Birthday Rule Insurance Work?

Let’s say that a dependent child is covered by both parents’ health plans. The father’s birthday is on March 10th, and the mother’s birthday is on June 15th. According to the birthday rule insurance, the father’s plan will be the primary insurance plan for the child because his birthday comes first in the year.

If the child needs medical treatment that costs $5,000, the father’s plan will pay the first $3,000, up to the limits of the plan. The mother’s plan will then cover the remaining $2,000, as long as it is still within its coverage limits.

It is important to note that the primary insurance plan is not always the one with the highest benefits or lowest deductibles. It only means that the plan pays first, up to its limits, before the secondary plan kicks in.

FAQ About the Birthday Rule Insurance

Conclusion

The birthday rule insurance is a coordination of benefits method used by insurance companies to determine which health insurance plan is the primary one for a dependent child who is covered by two parents’ health plans. It is based on the birth dates of the parents, and the plan of the parent whose birthday comes first in the calendar year is considered the primary insurance plan. The primary plan pays first, up to its limits, before the secondary plan kicks in.