When a child is covered by more than one benefit plan, it is necessary to determine which pays first to avoid duplication of benefits. As a general rule, coordination of benefits depends on the benefit or insurance plans involved and the surrounding circumstances.
This is particularly true for self-funded plans and individual insurance contracts, where you may need to review the terms of the contract or plan document to determine benefit coordination.
Wisconsin law establishes specific guidelines for group insurance plans covering children of divorced parents.
Pursuant to the guidelines, when one parent has been assigned responsibility for the child’s dental expenses by a divorce decree or other court order that group plan will be obligated to pay first if the plan has actual knowledge of the assignment.
If there is no divorce decree or court order assigning responsibility for dental expenses between the parents, benefits under two or more group plans covering the child are paid as follows:
- The group plan of the parent with physical custody of the child pays.
- The group plan of the spouse of the parent with physical custody of the child pays.
- The group plan of the parent not having physical custody of the child pays (assuming there is joint custody and/or liability on the part of that parent to begin with).
If parents have joint physical custody, but neither has been assigned responsibility for the child’s dental expenses (or if the divorce decree makes both parents responsible for expenses related to the child’s dental treatment, but only one has physical custody), the group plan that pays first is determined in accordance with the “birthday rule.”
The birthday rule relies on the month and day of each parent’s birth, without regard to the year, and operates as follows:
- The group plan benefits of the parent whose birthday falls earliest in the year pays first.
- If both parents have the same birthday, the benefit of the group plan that has covered a parent the longest pays first.
- If the secondary group plan specifies it does not use the birthday rule and instead has a rule based on gender of the parent, and if, as a result, the coordination of benefits provision of the group plans conflict, the birthday rule does not apply and rule of the secondary group plan determines the order of benefits.
The above is intended to provide general guidance on how benefits may be coordinated between two or more group plans. Other more specific rules may apply under special circumstances such as, where one parent has lost a job or has continuation coverage.
Accordingly, it may be necessary in such cases to refer to the applicable provisions of Wisconsin law (generally Wisconsin Administrative Code INS 3.40(11)) and/or to the specific terms of the group plan policies involved.