Understanding the Coordination of Benefits

Issue 
A graduate student has two group health plans with the same insurer: a student plan and a part‑time employee plan. Both plans cover physiotherapy, but the insurer applied the student plan first, even though it had lower annual limits. The student questioned whether this was correct under CLHIA’s Coordination of Benefits Guideline G4, arguing that the higher, effectively unlimited employee plan should pay first so their student plan benefits were not depleted.

Resolution 
CLHIA’s Coordination of Benefits Guideline G4 does not explicitly address this exact scenario. However, it clarifies that the order of benefits is determined by coverage status (for example, student vs. employee), not by plan design features such as annual limits or whether a plan is “unlimited.” As a result, insurers would not change the order of payers based on which plan offers better coverage. Individual policy wording may further govern coordination of benefits and that many student plans allow opt‑out if the student has other coverage.

Issue 
An individual who is a retiree from one employer and is an active employee with another employer questioned why one group benefits plan was being treated as the primary over the other. The concern is that applying the coordination of benefits this way could limit access to dental benefits and result in higher out‑of‑pocket costs, rather than allowing benefits to be “maximized fairly” across both plans.

Resolution 
CLHIA’s Coordination of Benefits Guideline G4 explains the order of payment between multiple group plans is based on the individual’s eligibility status—active full‑time employee, active part‑time employee, or retiree—not on the level or generosity of coverage. The guideline does not include provisions for coordinating benefits in a way that maximizes coverage, as insurers are not aware of the details of other plans when processing claims. Our guideline suggests that student plans would pay first and retiree coverage would pay second in other circumstances.

While insurers are expected to follow the guideline, they may exercise discretion in limited circumstances, often on a case‑by‑case basis. Our policy team recommends the individual discuss the situation with their plan administrator and insurer, and follow the insurer’s complaint or ombudsman process if concerns remain. Group plan members can consult with the OmbudService for Life and Health Insurance as a final step.

Issue 
Spouses each have different types of coverage: the husband is covered under a group plan with his wife listed as a spouse, while the wife has an individual plan with her husband listed as a spouse. The uncertainty is which plan would be the primary payer (also known as “first payer”).

Resolution 
CLHIA’s Coordination of Benefits Guideline G4 explains individual plans are generally considered secondary to group plans. However, the guideline explains the order of payment ultimately depends on the contract wording of the individual policy. Most individual plans state they are secondary to other coverage, but there may be exceptions where an individual plan does not include this restriction and could pay first. Additional guidance and examples are provided in CLHIA’s Guide to Coordination of Benefits (Chapter 2) which clarifies how individual and group plans coordinate benefits (page 5).

Issue
Both spouses have coverage under separate group plans for the same benefit. When one spouse submits a claim and their plan pays first, the other spouse’s plan covers the remaining balance. However, when the order is reversed for the same claim and cost, the second plan does not always cover the full remaining amount. This can happen when the second plan applies its own “reasonable and customary” limits (the maximum amount an insurer will reimburse for a service).

Resolution
Under CLHIA’s Coordination of Benefits Guideline G4, when a claim is eligible under more than one group plan, there are limits on how much can be reimbursed overall. The combined payments from all plans cannot exceed 100 percent of the eligible expense—and in some cases may be less than the amount charged. 

If the second payer applies a reasonable and customary limit, it may determine that no additional payment is required—even if the first plan did not cover the full amount submitted. This is because reimbursement is based on each plan’s eligible expense level, not the provider’s billed amount.

Issue 
A parent with joint custody sought clarification on how the coordination of benefits (COB) should work when both biological parents have coverage and have also remarried, resulting in four possible plans (each parent and each stepparent). The confusion arose because although CLHIA’s Coordination of Benefits Guideline G4 explains the “birthday rule” for joint custody, but it does not clearly address how stepparent plans fit into the order of “first payer”, leading to inconsistent plan administration and claim handling.

Resolution 
We clarified that in joint‑custody situations where both parents have remarried, the COB order is determined by the birthdates of the biological parents only, with stepparent coverage applied afterward. The correct order is:

1. the biological parent with the earlier birthday,
2. the biological parent with the later birthday,
3. the spouse of the parent with the earlier birthday, and
4. the spouse of the parent with the later birthday.

This approach applies even if one biological parent does not have their own coverage. The clarification resolved the dispute by confirming that stepparent plans do not override the birthday rule, helping ensure consistent claims handling.

Issue 
Confusion arose about how to apply the coordination of benefits (COB) rules for dependent children in single‑custody versus joint‑custody situations, particularly when parents have remarried and stepparents and the parents all have plan coverage. The question was whether a stepparent’s plan could pay before the other biological parent’s plan, and how the “birthday rule” should be applied.

Resolution 
We clarified that the custody arrangement determines which COB rules apply.

• In single‑custody situations, the custodial parent’s plan pays first, followed by the custodial parent’s spouse, then the non‑custodial parent and their spouse.
• In joint‑custody situations, the birthday rule applies based on the biological parents’ birthdates, regardless of remarriage. The biological parent with the earlier birthday pays first, followed by the other biological parent. Stepparent plans apply only after both biological parents’ plans, in birthday order. Even if a biological parent has no coverage, their birthdate is still used to determine the order. This clarification confirms that a biological parent’s plan always takes priority over a stepparent’s plan when both biological parents have coverage. 

Issue
Under the “birthday rule” for coordination of benefits, the father’s plan is the first payer and the mother’s plan is the second payer. The mother takes their children to the dentist and pays the full cost out of pocket. The claim is then submitted to the father’s plan, but he does not reimburse her for the expense. The mother asks whether the order of benefits can be reversed so she can be reimbursed directly under her plan.

Resolution
Under CLHIA’s Coordination of Benefits Guideline G4, insurers are required to follow established rules to determine the order in which plans pay claims. This order cannot be changed on a case-by-case basis simply to accommodate individual circumstances.

As a practical alternative, the mother may wish to speak with the dental office about arranging an assignment of benefits. This allows the insurer to pay the provider directly, helping to avoid out-of-pocket costs and reimbursement issues. Another option is to use a provider who accepts assignment of benefits.

Issue 
A retired federal government employee with health insurance coverage under a public service plan and First Nations health coverage found that both insurers were refusing to pay a claim. Each insurer said they were the second payer under the coordination of benefits rules. The individual asked the CLHIA for help to determine which plan should pay first.

Resolution 
We explained that CLHIA’s Coordination of Benefits Guideline G4 does not address this specific situation and that our member insurers have not reached a consensus on the order of payers when First Nations plans are involved. While plan sponsors often expect First Nations plans to pay first and private insurance second, our member insurers do not all follow the same approach. Because there is no single rule for how to handle the coordination of these benefits, the CLHIA recommended escalating the issue to each insurers’ ombud officers, to explore interim solutions such as a 50/50 split, and, if necessary, referring the matter to the OmbudService for Life and Health Insurance for further review.

Issue 
A question was raised about the correct coordination of benefits rules to apply when an individual has three types of coverage for prescription drugs at the same time and which plan would pay the drug claim first: coverage as an employee under an employer plan, coverage as a student under a university plan, and coverage as a dependent under a parent’s plan. The uncertainty was whether priority should be based on how long each plan had been in force or on the individual’s coverage status under each plan.

Resolution 
We clarified that the order of “first payer” is based on coverage status, not length of coverage. The drug plan where the individual is covered as an employee pays first, followed by the student plan, and then the plan where the individual is covered as a dependent. However, if the individual lives in Quebec, with a RAMQ‑eligible prescription drug prescribed, a different order applies: the employee plan pays first, the dependent plan pays second, and the student plan pays third. The CLHIA also noted that many student plans allow students to opt out if they have other coverage for prescription drugs, which may help avoid this coordination of benefits issues altogether. 

Issue 
An individual with both Non‑Insured Health Benefits (NIHB) coverage and a group employer plan sought clarification on which plan should pay a claim first. The confusion stemmed from conflicting guidance: federal government materials indicated NIHB should be accessed after employer coverage, while the employer’s insurer treated NIHB as the “first payer”, pointing to changes in industry coordination of benefits guidelines since 2017. The individual questioned why this issue was not addressed in CLHIA’s Coordination of Benefits Guideline G4.

Resolution 
We explained that CLHIA’s Coordination of Benefits Guideline G4 is silent on NIHB coordination because there is no single industry position among CLHIA’s member insurers. While NIHB was previously treated as payer of last resort, this changed after First Nations plan sponsors challenged the approach, noting that NIHB has no legislative basis to be considered last payer. Many First Nations sponsors prefer that NIHB pay first, with privately funded insurance paying second. As insurers and NIHB do not all agree on the order of payment, CLHIA’s guideline does not offer a rule, and practices may vary by insurer.

We recommend contacting each insurer directly for a resolution or referring the matter to the OmbudService for Life and Health Insurance for further review. 

Issue 
A benefits administrator sought clarification on the coordination of benefits rules for when employees are both covered under an employer group plan and an association plan linked to the same employer. The situation was not explicitly addressed in CLHIA’s Coordination of Benefits Guideline G4, particularly where both plans had the same “in force” date, raising uncertainty about which plan should be the “first payer”.

Resolution 
This issue was discussed by CLHIA member insurers in November 2023. Our member insurers agreed that consistent with CLHIA’s guideline, the plan where the individual is insured as an employee should be treated as the “first payer”, while the association plan should be secondary. This holds true even when both plans are connected to the same employer and have identical “in force” dates. 

Issue 
A question was raised about how emergency medical claims should be handled under coordination of benefits rules when more than one insurer or plan administrator may be involved. Specifically, there was uncertainty about which insurer should take the lead when a claim is submitted, particularly if the first insurer contacted is not the “first payer” according to their terms or the plan has limited coverage.

Resolution 
We confirmed that emergency medical claims are governed by CLHIA’s Co-ordination of Benefits for Out-of-Country/Out-of-Province/Territory Medical Expenses Guideline 17, which defines the concept of the “first carrier.” The first carrier is the insurer or plan administrator first contacted and is expected to act in good faith to start assisting with the claim, even if it ultimately turns out they are the secondary payer. If the first carrier determines it cannot adequately manage the claim or identifies another plan as the first payer, responsibility may be transferred to another insurer after appropriate notification. This approach helps ensure timely assistance to the plan member, regardless of which insurer is ultimately responsible for payment.