What is the birthday rule?
The birthday rule is how health insurance companies decide which plan will cover your dependents if both you and your spouse have separate health insurance plans.
It isn’t a law, but it’s a standard practice that determines which plan is the primary plan, and which should be secondary.
How does the birthday rule work?
If you and your spouse have separate health insurance plans and you have listed your kids as dependent on both plans, then the primary insurance will pay for the treatment first. And if there are still any outstanding bills, then the secondary plan will cover up to 100% of the remaining cost.
The birthday rule places primary responsibility for your children based on whether you or your spouse was born earlier in the year. The year of birth doesn’t matter. It’s the month and day that plays into the birthday rule.
What if you and your spouse have the same birthday? In this circumstance, the plan that’s been in place longer is primary.
Are there exceptions to the birthday rule?
There are a lot of different situations in which the birthday rule doesn’t apply. The main one to remember is that a court order will always override the birthday rule. Here are a few other situations to consider.
| Situation | Does the birthday rule apply? |
|---|---|
| Parents divorced or legally separated | Depends on custody arrangement |
| Custodial parent remarries | No |
| One parent has COBRA | No |
| Newborn | Yes |
| Young adult with parent’s and spouse’s insurance | No |
Legally separated or divorced
If you’re legally separated or divorced and not remarried, the person with primary custody provides primary healthcare coverage for dependents. With joint custody, the birthday rule applies.
However, this stipulation only applies if a group plan covers both parents. If the parent with primary custody has an individual plan and the non-custodial parent has a group plan, the non-custodial parent’s health plan is primary.
Custodial parent is remarried
If you remarry, coverage works like this:
- Your plan provides primary coverage
- Your new spouse’s plan provides secondary coverage
- Your ex-spouse’s plan fills any remaining coverage gaps
One parent has COBRA insurance
If you have COBRA and an employer-sponsored group health plan covers your current or former spouse, they provide primary coverage. COBRA insurance offers continuation coverage that’s more expensive than a health plan offered through work for an active employee.
For a newborn
When a baby is born, the mother’s insurance will cover the delivery and related costs. A newborn is automatically covered under the parent’s policy for 30 days, after which they need to be added. When each parent has their own policy, the birthday rule will apply.
A young adult is covered under a parent’s and spouse’s plan
The birthday rule doesn’t apply in this case. Instead, the plan that has been covering the young adult for the longest period of time will be primary. A young adult can stay on a parent’s plan until age 26.
Do all health plans follow the birthday rule?
Not all plans follow the birthday rule. It’s not a law but a common claims practice that helps insurers figure out who pays claims.
This means it's essential that you read your health insurance policies carefully and work with your insurance companies to understand how the insurer coordinates benefits. It's a good idea to determine which plan is primary before you start incurring medical costs.
Contact your health plan if you can’t figure out how the birthday rule affects your insurance and which insurer pays first.
