Under coordination of benefits rules how are insurance claim

Under coordination of benefits rules how are insurance claim - SHRM-CP Practice Questions

Question

Under “coordination of benefits” rules, how are insurance claims processed?

Answers

correct

Charges are first allocated to the primary payer, and then residual charges are submitted to a secondary payer.
Claims are processed only at an “allowable amount” as determined by the insurance company, and any residual cost is an out-of-pocket charge to the employee.
Out-of-pocket expenses are deducted directly from the employee’s flexible spending account.
Charges are split evenly between the primary and secondary payers.

Explanation

The correct answer is: "Charges are first allocated to the primary payer, and then residual charges are submitted to a secondary payer."

Explanation: Under coordination of benefits (COB) rules, the primary insurance pays first. Any remaining eligible expenses are then submitted to a secondary insurance provider. The purpose of COB is to ensure that the total coverage doesn't exceed the actual cost of services, preventing overpayments. Employees are only responsible for costs not covered by either policy.

View Full Course Content Try our Free Questions

No Payment Cards Needed

SHRM-CP Test Prep exam

Normally $89

$69/month