What to know about a second insurance policy?

March 28, 2023 2:34 PM

We’re fortunate to have health insurance (GHI) through my spouse’s job, insurance that so far has been pretty good. I have finally gotten a “real” job myself, after years of freelancing.

We’re a family of four with no current major health problems, knock wood.
Is there anything I need to know about having two insurance policies per household? We’ve occasionally had to argue and fight to have random things covered, like ER visits on vacation, and I’m thinking that two policies means we have a better chance of not having to argue these denials to death.

Thank you.

posted by Ollie to Health & Fitness (10 answers total)

You generally cannot cover one person with two policies, and this is probably buried in the fine print or you can ask HR.

You should compare the individual-employee vs family costs on both plans, and then decide whether to put everyone on one policy, or one of you put the kids on yours and one of you get covered alone (which may work out better if either of you are fully-paid by your employer). I don't know that I've ever heard insurance charging per (minor) child dependent, so a scenario where you split up the kids between your policies is probably not one you need to worry about unless maybe one of them is between 19-25, which might make a difference.

You'll want to take deductibles into consideration - one person having to hit a $2500 deductible usually takes longer than 3-4 people hitting $4000, which is usually how employee-only versus employee+spouse+dependents breaks out on a lot of common policies.
posted by Lyn Never at 2:48 PM on March 28, 2023

Two commercial policies is more work, not less, because they’re gonna fight endlessly over who is primary (Medicare and a secondary works well OTOH). Best to avoid and just pick the plan that’s better.
posted by ThePinkSuperhero at 3:30 PM on March 28, 2023

You have to be careful that the insurance will actually work well together, for example two different hmo networks with nothing in common will never work as a secondary for the other.

Then you have to make sure that the costs on incurred services aren't less than the amount your paying for the insurance or you are losing money. Also two deductibles

For a healthy family this might not make a ton of sense. For someone with complex health needs this may be a better option. But it can be really tricky and insurance companies don't necessarily want you to do this so tiny obscure rules can make your life difficult.
posted by AlexiaSky at 3:33 PM on March 28, 2023

My wife sort of accidentally had two policies. Look up “primary” and “secondary” insurance. Usually it’s more pain.
posted by sandmanwv at 3:37 PM on March 28, 2023

My kids were covered under two policies, and there were accepted rules about which policy was primary - I think it was the one from the parent with the earliest birth date. From this page, which gives a quite clear explanation, it looks like each of you would have your own employer's health insurance as primary. At any rate, one policy will be assigned as primary, and no, there won't be any kind of endless fighting about it.

According to the page I linked to, there are situations in which secondary insurance might cover something not covered by primary. The example they give is that you could run out of physical therapy sessions with your primary insurance and have further sessions covered by your secondary.

You don't get to pick and choose which policy will cover something. If your primary policy is going to be a jerk about ER coverage, you will still need to deal with that policy.

So there might be a small benefit to having two policies. I would suggest talking to the insurance brokers your companies work with to get more info. I would not trust random opinions online (including mine).
posted by FencingGal at 3:45 PM on March 28, 2023

For all of the reasons mentioned above, don't do this. My spouse and I have what they used to call "Cadillac" insurance plans, but his costs the same for him+kids as him+kids+me. Mine costs a "penalty" to include a spouse who "could" be insured at their job. (Blech, but I have lots of other great reasons to stay, I promise.)
Anyway, the point is that I'm not double -covered. I decline health, eye, and dental altogether at my company.
posted by atomicstone at 4:04 PM on March 28, 2023

When you are covered under two different plans, you will need to do a "coordination of benefits" annually with both plans to determine which one is primary and which one is secondary. Do not skip this step and remember you will have to do it again next year. There are rules about which plan is considered primary - for you and your husband it will be the one offered by your own employer. For the kids, I think whichever parent has the earlier birthday will be deemed primary but you need to let the insurance company figure that out for themselves.

Once you have that sorted, you need to make sure that any medical folks have information about both plans including which is primary. The claim goes to the primary as normal and they create an Explanation of Benefits which shows their calculation of what they pay and what the client pays. If you are lucky and both plans are with the same company, they might automatically route it internally to calculate the benefits from the seconday plan. Otherwise, if you are semi-lucky your medical provider will then submit both the EOB and a secondary claim to the second insurance company. Less lucky and you will have to do this yourself

You will still have a deductible with the secondary but they should count what the primary paid as part of your copay so with luck you won't owe anything out of pocket once you get past the deductible.

With Medicare plans, the secondary only pays for Medicare covered services but with commerical insurance plans they will usually each follow their own rules about what is in-network and what is covered. So if you see a doctor that is in-network with your secondary, you will still have to file a claim with the primary, which may pay nothing or very little but then take the EOB and send it to the secondary to get the benefit of seeing an in-network doctor, including in-network pricing.
posted by metahawk at 5:44 PM on March 28, 2023

We have had this option and ended up with picking the more robust policy. Sometimes there is an employer perk if you can prove that you are on another policy and will be opting out of that benefit, though that maybe very specific to small employers or ended with ACA.
posted by childofTethys at 6:45 AM on March 29, 2023

Depending on what the two policies are this can be a useful thing. My wife’s insurance is a good HMO, with a fair amount of coverage locally (with very specific rules and approval policies) but not much coverage for no local providers or anything out of network. My insurance is a PPO, so more cost sharing but much more coverage / fewer restrictions / more flexibility. We started doubling up in part to get the broader coverage when we were traveling a lot and because my wife’s premiums were almost nothing and the HMO had a low deductible (both not the case any more!) so it didn’t feel like there was much drawback. After kids came into the picture it became clear that “belt and suspenders” coverage had its benefits, for particular types of care or providers that the HMO wouldn’t cover. Overall it’s not clear whether the benefits have outweighed the premiums but if they haven’t I don’t think it’s by much.

In terms of logistics FencingGal’s reference to the “birthday rule” applies — the kids’ primary is the one belonging to whoever has the earliest birthday in the year. The grownups are each primary on their own plan and secondary on their spouse’s. Nearly all providers we have worked with have been totally unsurprised by the setup and document the primary and secondary coverage without a blink. They also handle the submission of data to both insurances, which is usually done in sequence (the secondary needs to know what the primary has already paid for). Provider bills do show what each insurance has paid out and what you are responsible for after both.

You still need to keep an eye on the EOBs (explanations of benefits) to make sure everything makes sense within each insurer’s own policies - just had one situation where the HMO had incorrectly applied certain charges to the deductible when we had already met the deductible for the year. Sometimes there are also issues with how / what the provider bills for, but that would be true no matter what coverage you had.

The biggest problem we had with this situation was an HRA that was tightly linked to my insurer in the early years of dual coverage — after something was applied to the deductible on the PPO, the HRA would immediately step in and pay it even though the secondary insurance should have been applied first (since they would cover some or even all of the expenditure). Luckily my company switched insurers a couple years after that and the HRA was not as tightly coupled to the new insurer.

Feel free to memail in followup if I can answer any more specific questions about my real or your potential scenario.
posted by sesquipedalia at 9:48 AM on March 29, 2023

Thank you everyone. Both policies are PPOs. HR at my new job said I should register with mine as primary, spouse has his as primary, and kids are with the earlier birthday parent, as people suggested above. Thank you for helping me think this through!I hope there are no unexpected snafus.
posted by Ollie at 8:17 AM on April 2, 2023