Can A Person Have 2 Health Insurance Policies?
Health Insurance Policies
Hi there! So this morning, I was attempting to clean out my closet when I found two umbrellas. It got me to think — having a backup sometimes isn’t terrible. But is health insurance the same situation? Let’s find out!
Can you have two health insurance? The short answer is: Yes, you can, and many people do. The U.S. Census Bureau estimates more than 43 million people have multiple health insurance plans. That’s roughly 13 percent of the population (of the remainder, 79 percent had one plan and 8 percent none). Because the overwhelming majority of older Americans have Medicare, roughly half of older Americans have multiple health plan coverages.
HRs and business managers must understand how health insurance works when an individual has two health insurance plans. This article covers some common reasons that you may have primary and secondary insurance plans, as well as the benefits and downsides of dual coverage and how coverage is divided between the two plans.
Why Would Someone Have 2 Health Insurance Plans?
There are a few situations where someone may have coverage from multiple health insurance policies, including:
How Do Two Health Insurance Plans Coordinate Benefits?
And having two health plans does not mean that you’ll get double the full medical coverage. Rather, one policy will be the primary plan, and the other will function as secondary health coverage. This means that the total of one or both of your two plans will pay for the health expenses you incur and will never exceed 100% of the cost of those expenses.
Coordination of benefits (COB): the process to determine which insurance pays first on a claim. That’s why it’s important to know how primary and secondary insurance differ before you lock in two health plans. Read below about how they work.
Primary Insurance
Your primary plan is your main health insurance plan, and it is the one that pays first for your medical care. When you visit the doctor or when you need to purchase prescription drugs, for example, your primary insurer will pay the bills up to its coverage limits.
If you have a primary plan, you could be responsible for cost-sharing amounts, such as copays or coinsurance. You’ll probably also have an annual deductible and an out-of-pocket maximum.
Secondary insurance
Your second insurance plan usually only applies after your primary insurance has filled its coverage maximums. Your supplementary coverage kicks in if there’s anything left to pay after your primary insurer has paid its share of your healthcare costs.
Let’s say, for example, you have a $400 specialist visit. Your core plan pays 70%, so it will cover $280. Your secondary plan may pay a portion or all of the remaining cost depending on your coverage limits.
If your second plan has any cost-sharing amounts, you could be responsible for paying them, even if you have a primary health insurance plan.
Pros And Cons Of Having Dual Health Insurance Coverage
Having two health insurance plans has its pros and cons.
Benefits
- A secondary health insurance plan can help cover some of what your primary plan doesn’t.
- If the plans work together to help you cap your individual out-of-pocket responsibilities, your overall costs may be lower than they otherwise would be.
- If you suddenly were unemployed and lost one insurance plan, you may feel more secur
Drawbacks
- You could end up with two separate premium and deductible responsibilities that accumulate and cancel out the benefits of having two insurance policies.
- Your expenses might not be fully covered, even with two plans, because coverage can’t add up to more than 100% of your health costs.
- Processing claims can become more complex and time-consuming when the benefits process is coordinated.
- Connect with your HR team to understand the implications of having multiple insurance plans.
Are You Still Liable For Out-Of-Pocket Expenses With Two Health Insurance Plans?
Your primary and secondary insurance will pay expenses only up to their respective plan limits. You could still have an amount remaining after secondary insurance pays. This is why having two different health insurance plans can still lead to out-of-pocket costs.
Two plans may result in two premiums and two deductibles. If you are concerned about possible out-of-pocket costs, you have some coverage options.
If your employer provides a health reimbursement arrangement (HRA), then you can be reimbursed from your HRA, tax-free for your out of pocket medical expenses that qualify, up to a specified monthly allowance amount. Qualified costs can include your insurance premiums, deductibles, copays, and coinsurance fees, depending on the type of HRA.
Here Are The Top Three Types Of HRAs That Employers Provide
- This type of HRA can be used by employers of all sizes, and it is not limited to set annual contribution amounts. This health benefit is only available to employees who have a qualifying form of individual health coverage.
This HRA is for small employers with under 50 full-time equivalent employees (FTE). Its contribution limits are maximum amounts, and employees must have a health plan with minimum essential coverage (MEC) in order to participate.
This is for employers of any size that are using a traditional group health plan. Through this HRA, employees can receive reimbursements for eligible expenses not completely covered by their group plan. There are no limits on contribution amounts per year. But only employees who have signed up for their employers’ coverage can take part.
An HRA allows you to spend your allowance to offset any additional costs that you might have to pay out-of-pocket from being on two health plans.
Common Fact: There Are Plenty Of Situations Where You May Have two Health Insurances.
Here are a few common situations when people have two plans:
Conclusion
FAQ
Yes, you can be covered under two health plans at once. But, via coordination rules, you’ll make one your primary insurance and the other secondary health care coverage.
In general, if you have an employer-sponsored plan or an individual plan, that will serve as your primary insurance. The second policy is usually through a parent or spouse plan.
You can be on two plans at once, yes. Typically, your own plan will be your primary policy, and your parent’s plan will serve as a secondary plan that covers expenses. Your own plan might be a student medical plan, individual policy or employer-sponsored group health plan.
In most cases, your secondary policy will cover the copay that’s left over after your primary insurance plan pays its part. If your secondary policy has a copay as well, you may end up needing to pay a small copay amount as well after both insurance companies process your claim.
Having dual coverage can help lower your out-of-pocket medical bills, especially if you anticipate large healthcare costs.
