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pay claims submitted to them as they would in the absence of any
secondary responsibility by another insurance company.
Health insurance companies that are treated as secondarily
responsible for medical expenses and claims (hereinafter referred
to as secondary insurers) generally are obligated to pay only
that portion of claims representing the difference between the
amount the primary insurers pay and the total amount of the
claims. For example, if a child is injured and claims are filed
under health insurance plans maintained by both parents, the
primary insurer (i.e., the insurer issuing the plan of the parent
with the earlier birthday during the calendar year) would be
responsible for the total portion of the claim covered under its
plan (e.g., 80 percent of the amount of the claim) and the
secondary insurer would be responsible for the remaining
20 percent of the claim.
COB Savings
Each year, the difference between what health insurance
companies would pay if they were the primary insurer on all
claims covered by their medical insurance plans and what they
under COB provisions, as secondary insurers, actually pay on
claims are referred to in the health insurance industry as COB
“savings”. In the last illustration above, because the secondary
insurer pays only 20 percent of the amount of the claim,
60 percent of the amount of the claim represents, to the
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Last modified: May 25, 2011