Table of ContentsView AllTable of ContentsCoverage Under Two PlansCoordination of BenefitsThe Birthday RuleAutomatic Coverage: New DependentCovering a Dependent’s Dependent
Table of ContentsView All
View All
Table of Contents
Coverage Under Two Plans
Coordination of Benefits
The Birthday Rule
Automatic Coverage: New Dependent
Covering a Dependent’s Dependent
If a child is covered under both parents’ health plans, a provision known as the “birthday rule” comes into play, guiding how the coordination of benefits will work.
The birthday rule says that primary coverage comes from the plan of the parent whose birthday (month and day only) comes first in the year. The other parent’s health plan then provides secondary coverage.
Catherine Falls Commercial/Getty Images
Most people tend to have just one health insurance policy. But it’s possible to have more than one, especially if a household has two parents whose jobs both offer employer-sponsored health coverage.
Although there’s usually an option to put the whole family on one policy, that’s not always the best solution. And it’s not always possible, as some employers don’t offer coverage to spouses, particularly if they have an offer of coverage from their own employer.
When each parent has their own health plan, they both have the option of adding their children to their plan. Many families choose to add children to just one parent’s plan, but some choose to add them to both plans, especially if the employers cover a significant portion of the monthly premiums.
This double coverage approach can be a money-saver, as the second plan can be used to cover expenses that would otherwise be out-of-pocket costs under the first plan.
Coordination of benefits means that one insurance plan is designated as the person’s primary coverage and the other is secondary. When there’s a medical claim, the primary insurance pays first, paying benefits as if it’s the person’s only insurance.
Then the secondary insurer steps in and picks up some or all of the remaining out-of-pocket costs that the primary insurance didn’t pay (e.g., the deductible, copay, or coinsurance, or costs for specific services that aren’t covered under the primary plan but that are covered under the secondary plan).
The specifics vary in how much the secondary insurer will pay—it depends on the plan and the medical claim. In some situations, it’s clear which insurance is primary and which is secondary:
The birthday rule applies when a child is covered under both parents’ health plans. Primary coverage comes from the plan of the parent whose birthday (month and day only) comes first in the year, with the other parent’s health plan providing secondary coverage.
Let’s say Abigail and Armando each have their own employer-sponsored health insurance, and they’ve opted to add their children to both plans. Abigail’s birthday is August 20, and Armando’s is November 5.
Since Abigail’s birthday comes first in the year (it doesn’t matter how old they are, as the birth year is irrelevant), her plan will provide primary coverage for the children, and Armando’s will be secondary.
The birthday rule is part of a longstanding model act from the National Association of Insurance Commissioners (NAIC).States and insurers can use different approaches, but most have adopted the birthday rule as a uniform, unbiased means of determining primary and secondary coverage in situations where a child has coverage under both parents’ plans.
Although the birthday rule is the general standard, there are various situations where other procedures are followed in determining which policy is primary:
If both parents have the same birthday, the primary plan will be the one that has been in effect longer. So in the example above, if Abigail and Armando both have an August 20 birthday, but Armando has been covered under his plan since 2006 while Abigail has only been covered under her plan since 2014, Armando’s plan would be primary.
If the parents are divorced with joint custodyand a court has not specified which parent is responsible for providing health coverage for the dependent children, the birthday rule would be used to determine which plan is primary if both parents maintain coverage for the children.
However, it’s common in a divorce for one parent to be responsible for maintaining coverage. In that scenario, that parent’s health plan would be primary, regardless of the parents’ birthdays.
If one parent is covered underCOBRAorstate continuationcoverageand the other has active employee coverage (and the children are covered under both plans), the COBRA or state continuation plan will be secondary.
If a young adult has coverage under a parent’s plan and a spouse’s plan, the plan covering them for longer will typically be primary. But if the coverage under both plans took effect on the same day, the birthday rule would apply.
The insurers would look at the parent’s birthday (or both parents’ birthdays, if the person has coverage under two parents’ plans in addition to a spouse’s plan) as well as the spouse’s birthday to see which comes first in the year. The policy linked to the person with the earliest birthday would be primary.
Note that if a young adult has coverage under a parent’s health plan as well as their own employer’s plan, their own employer’s plan will be primary, and the birthday rule would not apply.
Automatic Coverage for a New Dependent
Most health insurance policies are required to automatically cover a new dependent (newborn or newly adopted child) initially, but you’ll have to request that the child be added to your policy (within 30 to 60 days, depending on the plan) in order to continue that coverage going forward.
This is part of another NAIC model act, although some states have set their own requirements regarding coverage for new dependents.
In situations where each parent has their own health plan, a newborn or newly adopted child may end up in a coordination of benefits scenario, even if the parents don’t intend to maintain more than one policy for the child.
Because the father also had his own health plan and his birthday was earlier in the year, the mother’s insurance initially rejected the bills, noting that they should have been sent first to the father’s health insurance.
The situation eventually got resolved, with the mother’s insurance picking up the tab for the bills the father’s plan didn’t pay. But it took the parents more than a year of wrangling with their insurers to get it sorted out.
The birth or adoption of a child is aqualifying life eventthat allows the family to make changes to their health coverage.It may be in the family’s best interest to move the whole family onto one policy.
But if separate policies are maintained, make sure you understand how the child will be covered immediately after the birth or adoption, even if you intend to only add the child to one parent’s policy.
As a side note, it’s important to understand that new dependent coverage is not necessarily provided if the new parent is covered undertheir own parents’health insurance.
The Affordable Care Act requires health plans to allow young adults—even if they’re no longer tax dependents—to remain on their parents’ health coverage until age 26. But that plan does not have to (and generally won’t) extend coverage to the dependent of a dependent.
And health plans arenot requiredto cover costs associated with labor and delivery for dependents.
So although you might be covered under a parent’s health plan, your child—their grandchild—likely cannot be added to the policy.
Summary
If you have a clear preference for which policy would provide better coverage, you might prefer to insure the child on just the policy—especially if the other parent’s policy would end up being primary under the birthday rule.
8 SourcesVerywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Kaiser Family Foundation.Employer health benefits: 2023 annual survey.Centers for Medicare & Medicaid Services.Coordination of benefits and third party liability.Centers for Medicare & Medicaid Services.How Medicare works with other insurance.National Association of Insurance Commissioners.Coordination of benefits model regulation.National Association of Insurance Commissioners.Newborn and adopted children coverage model act.National Public Radio.“Birthday rule” blindsides first-time parents with a mammoth medical bill.HealthCare.gov.Qualifying life event (QLE).National Women’s Law Center.Covered through a parent’s plan? Your prenatal services are covered.
8 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Kaiser Family Foundation.Employer health benefits: 2023 annual survey.Centers for Medicare & Medicaid Services.Coordination of benefits and third party liability.Centers for Medicare & Medicaid Services.How Medicare works with other insurance.National Association of Insurance Commissioners.Coordination of benefits model regulation.National Association of Insurance Commissioners.Newborn and adopted children coverage model act.National Public Radio.“Birthday rule” blindsides first-time parents with a mammoth medical bill.HealthCare.gov.Qualifying life event (QLE).National Women’s Law Center.Covered through a parent’s plan? Your prenatal services are covered.
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
Kaiser Family Foundation.Employer health benefits: 2023 annual survey.Centers for Medicare & Medicaid Services.Coordination of benefits and third party liability.Centers for Medicare & Medicaid Services.How Medicare works with other insurance.National Association of Insurance Commissioners.Coordination of benefits model regulation.National Association of Insurance Commissioners.Newborn and adopted children coverage model act.National Public Radio.“Birthday rule” blindsides first-time parents with a mammoth medical bill.HealthCare.gov.Qualifying life event (QLE).National Women’s Law Center.Covered through a parent’s plan? Your prenatal services are covered.
Kaiser Family Foundation.Employer health benefits: 2023 annual survey.
Centers for Medicare & Medicaid Services.Coordination of benefits and third party liability.
Centers for Medicare & Medicaid Services.How Medicare works with other insurance.
National Association of Insurance Commissioners.Coordination of benefits model regulation.
National Association of Insurance Commissioners.Newborn and adopted children coverage model act.
National Public Radio.“Birthday rule” blindsides first-time parents with a mammoth medical bill.
HealthCare.gov.Qualifying life event (QLE).
National Women’s Law Center.Covered through a parent’s plan? Your prenatal services are covered.
Meet Our Medical Expert Board
Share Feedback
Was this page helpful?Thanks for your feedback!What is your feedback?OtherHelpfulReport an ErrorSubmit
Was this page helpful?
Thanks for your feedback!
What is your feedback?OtherHelpfulReport an ErrorSubmit
What is your feedback?
