It is possible to have coverage under two different health insurance plans in California. This situation is known as “dual coverage” and often happens when a spouse has health insurance through their employer in addition to the primary policyholder’s coverage.
California allows coordination of benefits between group health plans to provide more complete coverage. However, dual coverage with two individual plans is not permitted.
Below is an overview of how dual health insurance works in California, the coordination of benefits process, who dual coverage makes sense for, and what to consider before getting overlapping health plans.
Overview of Dual Coverage in California
In California, it is legal to have dual health coverage by being enrolled in two separate group health insurance plans. Here are some key things to know:
Dual coverage typically happens when a spouse has health insurance through their own employer.
The coordination of benefits rules in California allow payments from both group health plans to help cover costs.
The primary policyholder’s plan pays first, then the secondary plan covers some of the remaining costs.
Dual coverage is not allowed using two individual health insurance plans purchased directly by a person or family.
Dual Medicare and employer group coverage is also coordinated if the person is eligible for both.
So dual group health insurance in California can provide more generous coverage since payments from two plans are combined. But you cannot have overlapping individual health plans.
How Coordination of Benefits Works With Dual Coverage
When you have two group health insurance plans in California, they coordinate benefits using these rules:
One plan is designated as the primary coverage, and the other is secondary.
The primary plan always pays first for covered healthcare services.
The secondary plan then pays a portion of the costs based on the plan’s benefits.
Typically the policyholder’s employer plan is primary, and a spouse’s plan is secondary.
Claims are submitted to the primary carrier first, then the secondary carrier.
Out-of-pocket costs like deductibles and copays are lower with two plans.
But premiums paid by the employee or employer are higher for dual coverage.
So the goal of coordinating benefits is to maximize coverage across both health plans while reducing the individual’s overall share of expenses.
Who is Dual Health Insurance a Good Option For?
Dual health coverage in California works best for:
A married couple where both spouses have employer-provided group health insurance. Going on both plans coordinates payments.
Families with children to maximize coverage by having kids enrolled under both parents’ plans.
Those with high medical costs such as chronic conditions to minimize out-of-pocket expenses and cost sharing.
Medicare beneficiaries who also qualify for an employer plan to coordinate the two policies.
Having dual coverage is of most benefit when coverage and out-of-pocket costs differ substantially between two group health plans. If the plans are very similar, dual coverage may provide less additional value.
What to Consider Before Getting Dual Health Insurance
Things to consider when deciding if dual coverage is right for your situation:
Premium contributions: Does your employer require you to pay to add your spouse to your health plan? This can offset coordination savings.
Comparable plans: If both group plans have similar coverage and provider networks, dual insurance provides less benefit.
Higher premiums: Your employer or their insurer pays more to coordinate coverage across two policies. This raises premiums.
Plan differences: Make sure you understand how the two plans differ in deductibles, copays, provider networks, drug coverage, etc.
Claims coordination: Confirm that both group health insurers coordinate claims payments with each other to maximize benefits.
Medicare enrollment: Those eligible for Medicare Part A and B may find it more affordable to drop group coverage and enroll in Medicare plans instead.
For dual coverage to make financial sense, the savings from coordinating benefits should exceed any additional premium contributions or costs incurred. Compare plans carefully before deciding.
How Employers Manage the High Cost of Dual Coverage
Offering health benefits to employees with dual group health coverage is very expensive for California employers. Companies utilize strategies to reduce costs associated with covering dual-enrolled employees:
Increasing employee premium contributions for spouses covered on another employer’s plan. This incentive causes fewer employees to add on a dual-enrolled spouse.
Implementing surcharges for spouses who have coverage available from their own employer. This helps offset the higher costs of dual coverage.
Excluding spouses who have coverage from their own job. This approach limits dual coverage eligibility.
Requiring spouses to enroll in their own employer’s plan as primary. The company’s plan would then serve as secondary coverage only.
While employers cannot deny enrollment to eligible employees, they use percentage premium contributions and surcharges to discourage expensive dual health coverage enrollments.
The Bottom Line
But there are also additional premium expenses associated with dual coverage that employers aim to minimize through incentive strategies. Before getting two health plans, make sure dual enrollment makes financial sense for your health needs and situation.
Frequently Asked Questions (FAQ)
Q: Can I have two individual health insurance plans in California?
A: No, dual coverage is not allowed using two separate individual health plans that you purchase directly from insurers. Dual coverage is only available through employer group health insurance plans in California.
Q: Does dual insurance provide full double coverage?
A: No, dual coverage does not mean double coverage. The secondary plan only picks up a portion of costs after the primary plan has paid. But coordination between the two group plans lowers your deductibles, copays, and coinsurance costs.
Q: Is dual coverage with Medicare and employer plan allowed?
A: Yes, California group health plans do coordinate benefits with Medicare for active employees who are eligible for both Medicare and an employer plan. This can help lower out-of-pocket costs.
Q: Can I get dual coverage through Covered California plans?
A: No, you cannot have two different Covered California health plans or coordinate coverage between Covered California plans and group employer plans. Dual coverage is only available through employer group health insurance in California.
Q: If my employer pays 100% of premiums, should I get dual coverage?
A: If your employer covers your entire health premium, and your spouse’s employer does too, then dual coverage is advantageous since there are no out-of-pocket costs for the premium contributions. The coordination provides additional coverage at no additional premium cost to you.
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