Group insurance is designed for real life. And in our lives, we may have complex relationships with family members and institutions which result in overlapping coverage from two or more group health and dental plans. When these situations occur, all life and health insurance companies follow the guidelines set out by the Canadian Life and Health Insurance Association (CLHIA) to ensure consistency in processes. Essentially, these are policies that describe which company pays first and how much it pays.
GENERAL GUIDELINES
If you are covered as a member under a plan, that plan will always pay before a plan that covers you as a dependent. In situations where you have the same status under more than one plan, the plan that covered you the longest pays first.
The plan paying first will calculate benefits as it normally would. The plan that pays second calculates benefits for each item based on either: the lowest amount that would have been payable had it been the first plan, or 100% of the eligible expenses minus the benefits paid by the first plan.
Combined payment from all plans cannot exceed 100% of the eligible medical or dental expenses. In cases where there are maximum spends or limited visits to a health or dental practitioner per year, when the plan pays out any benefit for the visit, it will count as a visit and toward any maximums on both plans.
WHO PAYS FIRST?
CLAIMS FOR DEPENDENT CHILDREN
When both parents have plans and their children are covered under both as dependents, the plan of the parent with the earlier birth date in the calendar year pays first. If both parents have the same birth date, the plan paying first is based on the parent’s given name that occures first in the alphabet.
In cases of single custody, the plan of the parent with whom the child resides, i.e., the plan of the parent with custody pays first.
CLAIMS FOR POST-SECONDARY STUDENTS (UNIVERSITY OR COLLEGE)
Students may have some form of health or dental coverage through their school or a part-time job. These plans will always pay before any plan where the student is covered as a dependent.
RETIREE COVERAGE
A retiree plan will always pay second after any group plan that covers the same individual as an active full-time or part-time employee.
WHEN THERE IS BOTH INDIVIDUAL AND GROUP COVERAGE
If a person has individual coverage (i.e., a plan purchased outside of any group coverage), as well as coverage under a group health or dental plan, the group plan may pay first. Please review the provisions in your policy.
Should you still require more information, please do not hesitate to contact us.
