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The health insurance birthday rule is standard practice, although not law, with health insurance that determines how benefits are handled for dependents covered under more than one health plan. It’s used to decide which policy pays a claim.

When the birthday rule is used to determine which policy is primary and which is secondary, the policy of the person who is the oldest is considered primary.

This ensures that the same claim isn’t paid by multiple insurers and is also known as the coordination of benefits birthday rule (COB).

Primary and secondary insurance rules decide which insurer pays the claim first. If there are costs left after the primary plan pays up to its limits, the secondary payer then handles up to 100% of the remaining costs.

Read on to learn how the birthday rule works and when it applies.

KEY TAKEAWAYS
  • The health insurance birthday rule is used to determine which of two policies is responsible for providing primary coverage for your dependents.
  • If your birthday is earlier in the calendar than your spouse's, then you'll likely be the primary health insurance provider for the dependents.
  • If you and your partner are legally separated or divorced and not remarried, then the one with primary custody of the children provides primary healthcare coverage.
  • The birthday rule is not a law and not all insurance companies use it.

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.

BirthDay Rule Situations
SituationDoes the birthday rule apply?
Parents divorced or legally separatedDepends on custody arrangement
Custodial parent remarriesNo
One parent has COBRANo
NewbornYes
Young adult with parent’s and spouse’s insuranceNo

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.

Frequently asked questions

What is coordination of benefits?

Coordination of Benefits (COB) is how two insurance companies work together to cover an insured person. The primary health plan pays the costs first, and then the secondary plan will pick up any remaining costs.

Can both parents have health insurance for a child?

Yes.There’s no law against having a child on two plans, but one plan will always be primary. However, it’s worth examining the plans, coverage, and costs to see if it’s really worth paying for both plans to have secondary coverage.

What are the pros and cons of the birthday rule?

The health insurance birthday rule is an objective way of determining which plan should be primary, making it easy to decide. However, it prevents parents from deciding for themselves which plan is best to cover their children. One plan may have better benefits or work with a provider the other doesn’t.

How can you avoid the birthday rule when it comes to insurance?

The easiest way to avoid the birthday rule is to look at both health plans and decide which is the better choice. Then, move everyone to that plan and drop coverage with the other one.

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