Coordinating Family Health Coverage

Sometime between now and Dec. 31, millions of working people will have to pick their health-insurance benefits for next year. The decision is hard enough, given all the options: from conventional major medical plans to preferred-provider networks. But it's even more complicated for couples who have to coordinate coverage. Should you each enroll for individual coverage from your respective employers? Should one spouse take a family plan? Should you both sign up for the family option to buy extra protection?

One change many companies are making may help you answer at least one of these questions. In the past, most plans offered coordination of benefits (cob), meaning the secondary plan for each family member would pick up expenses the primary one didn't cover. (The plan of the parent whose birthday comes first in the year usually provides the primary coverage for the children.) With dual benefits, it may be possible to get 100% coverage. For example, if your company's plan paid 80% of a $100 medical bill, you could receive reimbursement for the $20 balance from your spouse's plan.

CARVED OUT. But a growing number of employers are replacing cob provisions with nonduplication policies. That means you may no longer be eligible for additional payments from your spouse's plan. Since employees usually must contribute extra for family coverage, two plans may no longer make sense. "You have to decide whether the additional protection you'd get from enrolling in both plans is worth the extra cost," says Gary Thompson, a Foster Higgins benefits consultant.

Whether you qualify for cob or not, Thompson suggests you do a quick analysis of the basics of each plan. The idea is to compare out-of-pocket costs under each if your family has various levels of medical expenses. First consider deductibles--the amount you have to lay out before the plan covers a portion of the bills, usually 60% to 80%. Then, look at the maximum each plan requires you to spend before it picks up 100%.

Now, you're set to see how the plans stack up. Make estimates--based on age, health, and medical history--of whether you think one person's 1993 medical bills will run a few hundred dollars, a few thousand, or more. If you see that one plan results in significant out-of-pocket savings, you can weigh potential savings against the annual premium cost of each plan. If one spouse's plan offers a substantial advantage when you take all these factors into account, your best bet might be to enroll your entire family in just that one.

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