Question

Michael and Jan Scott are married and have one child, Madison. Michael was born on March 18, 1979. Jan was born on January 24, 1980. Michael and Jan are each covered under generous employee benefit plans at their respective employers. The plans also cover the spouse and children of the worker for no extra fee. Under the birthday rule provision, which of the following is TRUE regarding coverage of Madison’s health care expenses? Each plan will pay one-half of the expenses. Each plan will pay it’s prorated share of any claims. Coverage under Jan’s plan is primary, and coverage under Michael’s plan is excess. Coverage under Michael’s plan is primary, and coverage under Jan’s plan is excess.

Answer 1

Coverage under Jan's plan is primary and coverage under Michael's plan is excess.

This is because according to the birthday rule the health plan of the parent whose birthday comes first in the calendar year is designated as the primary plan, according to the National Association of Insurance Commissioners. Here we can clearly see that Jan was born on January 24 and Michael on March 18. Year of birth does not matter. January comes first in the calendar year so Jan's plan will be considered here as primary.

Main motive of birthday rule is that it provides an informal procedure to the health care industries in order to determine the coordination of benefits when children are listed as dependents on two parents group health plans.Children and adults can be covered under more than one health plan. When they covered under multiple health insurance plans, the plans will have to coordinate parents and their children's benefits. The plans need to coordinate benefits to make sure that neither parents nor their doctor is reimbursed for more than 100 percent of a medical claim's actual cost.