Getting the Full Benefit of Dual Coverage in California

How does group health insurance work in California if an employee has coverage under two different group health plans?  This is an important consideration for employees who have coverage from both their employer and there spouse's employer.  In California, qualified group health insurance plans co-ordinate benefits with each other.  This means that you can get coverage under your health plan and additional sharing of claims cost under your spouse's group plan if you are enrolled on both.  How does this work and what should an employer or employee consider in light of this benefit coordination?  Important Note...Group health insurance does not coordinate coverage with individual health plans in California.

How do California group carriers coordinate benefits

The first consideration is which carrier is primary and which carrier is secondary.  Typically, your employer's plan is primary and your spouse's plan is secondary.  This means that a given claim will go first to your California health carrier and then to your spouse's carrier where they will coordinate claims payments based on your plan's benefits.  Since Group health insurance plans can be so different, it's a bit complicated to determine exactly how the benefits will be coordinated but you should have less cost-sharing or out-of-pocket costs with both plans than if you only had one health plan in place.  You just want to make sure that both carriers are seeing the claim and paying accordingly.

Medicare and Small Group health insurance coordination

An active employee of an employer-sponsored health plan who qualifies for Medicare Part A and B (usually age 65 or older) can also see coordination between his/her group plan and Medicare benefits.  The employee should take into account cost he/she would pay any contribution towards the group plan (if any) versus the cost of Part B, a Medicare supplement plan, and a Part D prescription plan.  Keep in mind that the Part D benefits are typically not as rich as group health insurance depending on the particular plan.  Some people stay on the group plan just to keep their prescription coverage.

What should an employee consider when coordinating dual benefits?

The main consideration for an employee is whether the extra coordination warrants any cost out of his/her pocket in terms of shared contribution to premium.  If both employer's pay 100% of employee and spouse coverage than this is not an issue and there is very little downside (if any) to being enrolled on both.  If the employee contributes say 25% towards the employee coverage and 25% towards dependents, then it makes sense to evaluate whether this extra expense is justified.  Look at the annual premium difference versus an estimation of benefits differences.  Since it's tough to know exactly how the two plans will coordinate coverage, you have use a gut check.  We can help you evaluate these options of course here: help@calhealth.net  

How California companies are offsetting the high cost of dual coverage

Dual coverage is very expensive to a company.  The company is paying 100% premium to cover a shared portion of the particular risk for an employee and/or spouse with dual coverage.  Companies have increased contribution percentages for employees and/or dependents to make dual coverage less attractive and to help mitigate the constant increase in health care cost over the past decade.  An employee is less likely to add an already covered spouse (through other group plan) to his/her coverage if a percentage of the spouse's premium must be contributed.  An eligible employee and dependents cannot be denied coverage if they have other group health as a dependent but the percentage contribution makes it less attractive.

Other important concepts to help you understand your California group health insurance quote are:

Comparing Cobra versus Individual health insurance
Small Group RAFF
Why offer Small Group health insurance
Guide to Group health insurance in California
Group health anniversary date
California group health insurance