What Is the Birthday Rule for Health Insurance?
If a child has health insurance through both parents, the birthday rule determines which parent's coverage pays first and which pays second.
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The birthday rule for health insurance says coverage of the parent whose birthday comes earlier in the year pays first. The year each parent was born is not taken into consideration.
For example, a parent with a March birthday would pay first, making it the primary coverage, if the other parent has an October birthday.
How does the birthday rule work?
When a child is covered by two parents' health insurance policies, the birthday rule decides which insurance company will pay first. This can affect your child's benefits because one parent may have better coverage than the other parent.
It also impacts how much you pay for costs like copays, coinsurance and deductibles.
With the birthday rule, one parent's coverage, called the"primary" insurance plan, pays first. Then the other parent's plan, called "secondary" insurance, may help pay for some things the primary insurance did not cover. This may increase the coverage you can get, which can lower your medical bills.
For example, let's say a child needs surgery and their doctor recommends a course of prescription drugs after the treatment. The primary insurance may cover the surgery, but not the drugs. If the secondary insurance plan covers the prescription drugs then it would kick in.
It’s important to remember the birthday rule only applies to children covered by both parents’ separate insurance policies. If you have a single insurance plan, you won't have to worry about the birthday rule.
The birthday rule also applies to dental insurance. It doesn't matter if that care is part of a health insurance policy or if it comes from a stand-alone dental plan.
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Example of the Birthday Rule for insurance
Imagine a 12-year-old boy named Mark has coverage through both of his parent's insurance plans. His mom was born on April 2, 1985, and his dad was born on Jan. 17, 1987. Even though his mom is older than his dad, his dad's insurance will pay first for Mark because his dad was born earlier in the year than his mom.
Mark's secondary insurance rarely kicks in because his primary insurance covers most services. However, if Mark needs specialty care that's not covered or only partially covered by his dad's insurance, then his secondary coverage would pay for it.
Coordination of benefits
The health insurance birthday rule is part of a set of rules called coordination of benefits (COB). COB helps insurance companies decide which health policy pays for which service when a person is covered by more than one plan.
The birthday rule helps insurance companies work together so they don't pay twice for the same service. It also makes sure children with dual coverage get the most from their insurance plans. By working together, the two insurance companies are more likely to give coordinated, not duplicated, care.
The medical insurance birthday rule is not a nationwide law, but it's a policy most insurance companies follow — and nearly every state encourages companies to use it.
Remember that even with dual coverage, each policy will still only cover certain services. That means the primary insurance company may not pay for some things or have full coverage for certain complications, leaving it to the secondary insurance to pick up the costs.
The secondary insurance may step in with full coverage, partial coverage or no coverage, depending on what the secondary plan covers. But most of the time, the secondary insurance will pay for at least some of the services not covered by the primary insurance.
Each plan has its own copays, coinsurance and deductibles. Regular health plans won't usually cover these costs for another plan, so you'll still have to pay those costs for each plan.
Pros and cons: Should you keep dual insurance coverage?
In most cases, it's cheaper for married parents to not have dual coverage.
In some cases, dual coverage may save you money in the long run if the two insurance companies cover enough different services, although it's rarely worthwhile. That's because the extra monthly cost is usually greater than the savings you'd get from having secondary coverage.
For most married couples, it makes better sense financially to drop the insurance plan that has worse coverage. However, divorced parents sharing custody may find that it makes sense to keep secondary coverage in some cases since the parents likely have different plans.
Health insurance coverage for newborns
The birthday rule usually comes into play for newborns, when babies are covered by both of their parents' policies.
The baby’s delivery and childbirth costs are automatically covered by the mother’s insurance policy. Usually, insurance companies automatically cover newborns for the first 30 days. The parents need to add a newborn to their insurance immediately after the 30-day period.
Births let you change your insurance coverage even if it's not open enrollment, because it counts as what's called a qualifying life event.
If the newborn has dual coverage, both policies automatically cover the newborn for the first 30 days, and the birthday rule determines primary and secondary coverage. However, the infant’s delivery and standard newborn services are covered by the mother’s insurance.
The birthday rule for health insurance is especially important in cases where the newborn has medical complications that keep them in the hospital for an extended period. In these cases, deciding which insurance pays first becomes necessary.
Expecting parents who can choose different plan options should review their plans and contact their insurance companies to ask about policy details. This will help make sure that your baby gets the best coverage possible.
What can go wrong when the birthday rule decides primary coverage?
When a child is covered by multiple health insurance policies, you could face high medical costs if the birthday rule makes the plan with poorer coverage primary. In this case, you may want to take the child off the less generous plan.
Parents with dual coverage should also review the plans regularly to make sure the two policies don't overlap too closely. Remember, health plans that mostly cover the same services rarely let you save money.
Exceptions to the birthday rule
Exceptions to the birthday rule exist to help with certain tricky situations, such as if both parents share a birthday.
Does the birthday rule apply?
Situation | |
|---|---|
| No | |
| No | |
| Sometimes | |
| No | |
| No | |
| Sometimes | |
| No |
Same birthdays
If a child is covered by the insurance of two parents who share the same birthday, the policy that started first serves as the primary plan. For example, if the mother’s plan has covered the child longer than the father’s plan, then the mother’s plan is the primary policy.
Divorce
In most divorce settlements, one parent is responsible for health insurance, and that parent’s policy has primary coverage.
Divorced with joint custody
The birthday rule decides which plan is primary when divorced parents have joint custody unless the judge decides otherwise.
Parent with custody remarries and child is added to step parent’s plan
In cases where a parent with custody remarries and a child is added to the new spouse’s insurance, the biological parent with custody's insurance is primary.
COBRA coverage
If one parent has insurance through an employer or the Affordable Care Act (ACA) marketplace and the other parent has COBRA or what's called state continuation coverage , the employer or ACA policy is primary.
Young adult covered by parent and spouse
The Affordable Care Act allows children to stay on a parent’s insurance policy until the age of 26. If a young adult is covered by both a parent’s plan and a spouse’s plan, the plan covering the young adult for the longest is primary.
If coverage for both plans started on the same day, the birthday rule applies.
Young adult covered by parent and employer
If a young adult is covered by both a parent’s plan and an employer group plan, the employer plan is primary. The birthday rule does not apply.
Frequently asked questions
What is the birthday rule for insurance?
The birthday rule determines primary and secondary insurance coverage when children have coverage under both parents’ insurance policies. The birthday rule says primary coverage comes from the plan of the parent whose birthday comes first in the year.
Can both parents have health insurance on a child?
Yes, both parents can have health insurance on a child. But, both policies won't pay out unless the primary insurance doesn't fully cover a certain medical service that the child needs. That means covering a child with two insurance policies usually doesn't make sense financially.
Can you be covered under two insurance plans?
Yes, you can get coverage through two health insurance plans as an adult. For example, you might have coverage through your employer's group health plan and your spouse's health insurance. Those under the age of 26 might have coverage through their own health plan and their parent's health insurance.
Methodology
Information regarding the birthday rule for health insurance was taken from the National Association of Insurance Commissioners (NAIC), an industry group. Other sources included HealthCare.gov and the American Dental Association (ADA).
Editorial note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.