Ace California Life & Health Insurance Exam 2025 – Burst Into Your Bright Insurance Future!

When a claimant is covered under more than one health plan, the provision known as Coordination of Benefits (COB) applies. This provision is designed to determine the order in which multiple insurance policies will pay benefits, ensuring that the total coverage does not exceed the actual costs incurred by the claimant.

COB is important because it helps to prevent overinsurance and ensures that each insurer knows its responsibility in paying claims. It typically involves rules that indicate which plan pays first based on factors such as the type of coverage, the relationship of the insured to the policyholder, or the policy effective date.

Understanding how COB works is essential for both policyholders and insurers, as it impacts claims processing and the management of healthcare costs. Other options like exclusion of benefits, benefit assignment, and health insurance portability do not specifically address situations involving multiple health plans and the interplay between them in terms of benefits provided.