Q: What’s the Difference Between Primary and Secondary Health Insurance?

Health insurance plans are something you can have more than one of. Individuals can have coverage under an employer-based plan while also having other coverage, such as via a spouse’s plan. And kids can have coverage under both parents’ health plans. When you are covered under two health plans, one plan is considered primary and the other is secondary. But what exactly is the difference between primary and secondary health insurance?

Primary health insurance is the plan that kicks in first, paying the claim as if it were the only source of health coverage. Then the secondary insurance plan picks up some or all of the cost left over after the primary plan has paid the claim. This is called coordination of benefits, and it’s sorted out by the insurance carriers involved—individuals don’t get to pick which plan is the primary one.

Then how do you know which plan is primary and which is secondary?

If you have coverage under a plan from your employer in addition to a spouse’s or parent’s plan, your own plan will be primary and the other plan will be secondary. This is also true if the additional coverage is with TRICARE or Medicaid, as those plans are always the secondary insurer if you have other coverage.

There are rules to make sure that people can’t profit from medical claims by getting duplicate coverage for the same illness or injury, so the total amount paid by the primary and secondary insurer won’t be more than the total cost of the claim.

But if you have coverage under your employer’s plan as well as under Medicare, there are varying scenarios for which plan will be primary and which one will be secondary.

What if my kids are also covered under their other parent’s health insurance plan?

If your kids are covered under both parents’ plans, there are some general guidelines that help determine which plan is primary and which is secondary.

Primary coverage generally comes from the plan that belongs to the parent whose birthday comes first in the year. So if one parent’s birthday is February 6 and the other’s is October 3, the kids will have primary coverage from the parent whose birthday is in February.

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There are some exceptions though:

  • Both parents have the same birthday: Whichever parent has had coverage under their plan the longest will be the one providing primary coverage to the kids.
  • Divorced or separated parents: The health plan of the parent with custody will be considered primary, and if the parents have joint custody, the birthday rule is generally used. But if there’s a court order requiring one parent to provide coverage, then that parent’s plan will be primary.
  • One parent has group insurance and the other has individual insurance: If one parent has employer-sponsored insurance and the other buys insurance on their own, the coverage from the parent with group insurance will be primary.
  • Active versus former employees: If one parent is a current employee and the other is a former employee receiving retiree or COBRA health benefits, the plan for the active employee parent will be primary.

These are not hard-and-fast rules though, so double check with both insurance companies to see exactly how coordination of benefits for your kids will be handled.

Comments

  • Wendy A

    Hello, if the primary insurance is a high deductible policy, can the secondary plan (which is not high deductible) cover the allowed expenses until primary plan deductible is met?

    Reply
    • Gusto Editors

      Hi Wendy! We recommend reaching out to your attorney or health insurance provider about this! They’ll be able to give you specific guidance for your situation.

      Reply
  • James

    I may soon have two retiree health insurances and am only 60 years old. Which one will be primary?

    Reply
    • Gusto Editors

      Hi James, you’ll want to talk to your attorney, as they’ll be better able to give you a recommendation based on your situation.

      Reply
  • Jasmine

    My son has his own individual plan that we pay for. We added him to my husband self funded group plan at work. My sons plan is his and only his not mine or his dad’s. Who is primary?

    Reply
    • Gusto Editors

      Hello, Jasmine! We recommend consulting with a licensed broker, since they’ll be able to give a recommendation for your particular situation.

      Reply
  • Tara

    I’m currently off on maternity leave with no direct employee benefits as of yet. But I have coverage from my ex that’s on our court order and coverage from my common law. Would my common laws coverage be primary? or would both be secondary since it’s not coming from my employer directly?

    Reply
    • Gusto Editors

      Hi Tara — since regulations can vary by location and employer size, we recommend talking to a licensed broker for specific guidance!

      Reply
  • Sarah

    I’m covered through my husband‘s insurance at work. I’m thinking about picking up coverage from my work as well. Do I have to use both or can I use just mine? when going to the doctor.

    Reply
    • Gusto Editors

      Hi Sarah! If you have coverage under a plan from your employer in addition to a spouse’s, your own plan will be primary and the other plan will be secondary. You should generally be able to use yours, but you will want to call your insurance carrier to confirm!

      Reply

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