Which term describes the coordination between two benefit plans where one plan pays after the other and may adjust its payout accordingly?

Which term describes the coordination between two benefit plans where one plan pays after the other and may adjust its payout accordingly?

• A. Coordination of benefits
• B. Underwriting
• C. Premium loading
• D. Policy rider

Answer: (A)

Coordination of benefits is the process that ensures two health insurance plans work together to decide which plan pays first and how much. The primary plan pays its portion up to its limits, and the secondary plan then covers any remaining eligible expenses, often adjusting its payout based on what the first plan already paid. This prevents overpayment and keeps total benefits from exceeding the bill. For example, with two plans in play, the first payer handles its share, and the second payer covers the rest up to its own limits. The other terms describe different concepts: underwriting is about assessing risk for premiums; premium loading adds to the base premium; a policy rider is an add-on provision.

Coordination of benefits is the process that ensures two health insurance plans work together to decide which plan pays first and how much. The primary plan pays its portion up to its limits, and the secondary plan then covers any remaining eligible expenses, often adjusting its payout based on what the first plan already paid. This prevents overpayment and keeps total benefits from exceeding the bill. For example, with two plans in play, the first payer handles its share, and the second payer covers the rest up to its own limits. The other terms describe different concepts: underwriting is about assessing risk for premiums; premium loading adds to the base premium; a policy rider is an add-on provision.