When an insured is covered under two group health plans, coordination of benefits (COB) is designed to:

Why A is correct

Coordination of benefits is a contract provision that applies when a person is covered by more than one group health plan. COB establishes an order of payment: a primary plan pays first, and the secondary plan pays remaining covered charges up to its own limits, so the total paid never exceeds the actual expense. The purpose is to prevent duplication and overinsurance while ensuring the insured still receives full reimbursement of covered costs. COB rules also avoid the delay and confusion that would result if each plan demanded that the other pay first. This provision is part of the standard contract-issue content for medical expense plans (AH-III.A.1d).

Why the other options are wrong

• B) Collecting full benefits from both plans would constitute overpayment or double recovery, which coordination of benefits is designed to prevent. COB explicitly caps the combined payment from both plans at the amount of the actual expense, so the insured cannot profit from having two policies.
• C) COB governs the order and amount of payment between two plans; it does not assign the insured to either plan's provider network. Network assignment is a separate managed care feature and is not affected by the coordination rules.
• D) COB does not require the insured to surrender or drop either policy. Both policies remain in force, and COB simply coordinates how the two plans pay so that the total does not exceed the actual covered expense.

Memory hook

COB picks who pays first and caps the total at the real expense.