The Birthday Rule for Insurance

Posted: September 13, 2023

The birthday rule insurance policy is used by many health insurance companies that want to provide consistency and coordination of benefits across various policies. For parents with a child listed as dependent on both plans, understanding the birthday rule can help them determine who is responsible for payments. Explore what the birthday rule for insurance means and what exceptions might apply.

What Is the Birthday Rule for Insurance?

The birthday rule for insurance helps parents and health plans determine which policies are responsible for payments. The rule was created by the National Association of Insurance Commissioners (NAIC) and is used by many insurance companies today. It applies to children listed as dependents on both parents’ insurance policies.

According to the birthday rule, primary coverage is given by the parent’s plan whose birthday comes before the other. While birth years are not considered, the day and month of a parent’s birthday determine the coverage. The parent whose birthday comes second in the year will provide secondary coverage.

For example, if one parent has a birthday in April and the other in September, the parent with a birthday in April will be responsible for primary insurance.

According to the rule, primary and secondary payment determinations coordinate benefits to assist parents and health insurance companies with a child’s coverage. The birthday rule is meant to provide consistency across insurance plans so that payments, filings and benefits can be easily processed.

How the Birthday Rule Works

Many parents wonder how to determine primary and secondary insurance for their children. The birthday rule helps parents decide which insurance company will pay first for children listed as dependent on both parents’ insurance policies. The birthday rule affects benefits, copayments, out-of-pocket costs and deductibles.

According to the birthday rule, the primary provider will always pay first. Whatever benefits are covered by the primary health insurance plan will determine how much the first plan will pay. Afterward, the secondary health insurance plan will pay what is left over from the primary provider.

Remember that the birthday rule applies only to dependents and not to children listed on one parent’s health insurance plan or children not listed on any parent’s health insurance plan. You can apply the birthday rule to dental care from separate policies or as part of a parent’s original plan.

What Are the Exceptions?

Many people wonder if all health plans must follow the birthday rule. The short answer is no. But most insurance companies do follow the rule to make sure everything is clear. An exception might be made to the birthday rule in some specific circumstances.

1. Same Birthdays

An exception to the birthday rule might be made if both parents of a child have the same birthday. While rare, it can happen. If this is the case, the longer coverage plan will pay first. So, if one parent has had a plan for five years and the other three years, the parent with coverage for longer will be listed as primary.

2. Court Order

For children who have divorced parents or are part of a blended family, designated court orders override the birthday rule. After a divorce, the custodial parent is responsible for primary payment before the stepparent.

3. Divorce or Separation

An exception to the birthday rule is also made during separation or divorce. The parent with child custody is usually responsible for primary payment before the other parent. If one of the parents remarries, their new spouse will provide secondary coverage. The plan of the parent with no custody will pay last.

4. Active Employees

In some cases, an exception might be made for parents who are between jobs or have coverage through an employer. For example, the parent with employee health insurance is primary, while the parent with coverage through a former employer will pay second.

5. Group Health or Individual Plans

Some exceptions might be made if an ex-spouse has a different health plan than their former partner. If one has a group plan and the other has an individual plan, the group plan is usually responsible for primary payments.

Primary and Secondary Insurance Rules

Following the rules of primary and secondary insurance policies is essential. The birthday rule often varies between policies and states, though there are general rules you can keep in mind. Be sure to check with your state regulations and policy recommendations before taking any next steps.

For example, California is one of several states which actively enforces the birthday rule. Those with California’s Medigap coverage are now allowed to switch plans between 30 to 60 days after their birthday. The Medigap birthday rule ensures policyholders can switch between plans without the need for medical underwriting. You must conform to the following stipulations to switch between California plans:

• You must be a California resident.
• You must be a part of a Medigap plan.
• You must pick a new plan within 60 days of your birthday.
• You must switch to a plan with equal or lesser benefits.

Check with your insurance provider to be sure you are switching to an equal or lesser benefits plan. Medigap has various coverage types, from A, B, C, D, F and G to K, L, M and N.

While the birthday rule is not a law, most insurers follow its guidelines when permitted. It helps insurance companies and health care plans solve issues related to children listed on both parents’ health insurance plans. The rules of the birthday policy ensure that parents understand how to file a claim for their child when a medical need arises and what policy will cover it first.

To prevent payment problems, confusion, double-files and claims, the birthday rule states that one parent’s health insurance plan must be listed as the primary plan and the other parent’s plan must be listed as secondary. While it might not matter which parent’s plan is primary or secondary, you’ll want to consider each insurance policy closely before choosing.

According to the rules, the primary plan is responsible for paying claims first, and the secondary plan will be responsible for any remaining amount the primary plan won’t cover.

The secondary plan might only cover remaining expenses if the medical need is listed as a covered benefit underneath the parent’s existing plan. Read your policies carefully before choosing primary and secondary plans or filing a claim. A secondary plan might also not cover any services or benefits not listed in the plan. For example, if you see an out-of-network provider or receive services from a specialist not listed in the network, the secondary provider may not cover the rest of your bills.

Find Reliable Insurance With Help From Health for California

At Health for California, we assist families, individuals and seniors in finding the right health insurance plan to fit their needs. As a health insurance agency operating in California, we understand the need for primary and secondary insurance. Our licensed agents can assist you with applications, financial questions or other queries.

Health for California offers a reliable way to apply for new insurance, purchase plans and find the right options for your medical needs. Our agents have the knowledge and skills necessary to assist you, whether you need a quote, have questions about the application process or want to see if you qualify for financial assistance.

Contact us today to speak to a representative or explore health care plans online.