What is the Birthday Rule in Regards to Health Insurance?

If you and your spouse or domestic partner carry employer-sponsored health insurance and you have children, you can sign your child or children up under both plans. However, while it is certainly a wonderful thing to have your offspring covered by health insurance, one of the policies that your child or children are under will have to be deemed the primary plan. The birthday plan is a rule that was put into place in order to determine which policy – yours or our spouse’s – will be considered the primary policy for your children and which policy will be the secondary policy. The purpose of the birthday rule is to prevent the total coverage that your children have from exceeding all of the claims charges.

How does the Birthday Rule Work?

health insurance birthday ruleAs per the birthday rule, the parents whose birthday occurs closest to the start of the calendar year will be considered the primary plan for the child or children. Therefore, if your spouse’s birthday falls in January and yours falls in May, your spouse’s employer-sponsored health insurance will be the primary plan for your offspring.

The primary health insurance policy is the plan that will pay out the benefits for your child or children first. If the primary plan does not cover all of your child or children’s medical costs, the secondary plan will kick in and cover the rest of the costs. Furthermore, you will have to pay your deductible before the primary plan covers any of the claims that have been filed, and the secondary insurance may not be used to cover the deductible. However, the secondary insurance may be used to cover claims that the primary insurance does not cover; for example, if your child requires a surgical procedure that his or her primary insurance will not cover or does not fully cover, the secondary insurance can be used to cover the entire procedure or to cover the remaining amount of the procedure that were not covered by the primary insurance plan. Lastly, if you are going to use the secondary plan for a claim that your child’s primary plan doesn’t cover, you will have to pay the deductible before the provider of the secondary insurance will kick in and cover any expense.

The Birthday Rule isn’t Legally Binding

It should be noted that the birthday rule is not a law; rather, it is a practice that a lot of insurance companies use in order to prevent excessive coverage, as mentioned. Not all insurance companies use the birthday rule. To find out if the providers of your and your spouse’s insurance policies use the birthday rule, speak to a representative. If one provider does use this rule and the other doesn’t, it is likely that you will have to abide by the rule.

Birthday Rule Modifications

Besides insurance companies not using the birthday rule, there are other situations that may arise that would require the modification of this rule. Some of these situations include:

  • Birthdays that fall on the same day. If both you and your spouse’s birthday are on the same day, the primary plan for your child or children will be the one that has been in existence the longest.
  • Custodial parents.If you and your spouse or partner are divorced or legally separated, the policy of the parent who has custody of the child or children will be considered the primary plan, while the policy of the parent who does not have custody will be considered the secondary plan. There is an exception to this, though; if the parent who has custody has an individual insurance plan and the non-custodial parent has an employer-sponsored health insurance plan, then the non-custodial parent’s plan will act as the primary policy.
  • Remarried parents. If you are divorced, remarry, and are covered by your new spouse’s insurance plan, the insurance of the parent who has custody of the child or children will be considered the primary insurance policy and the policy of the stepparent will be the secondary policy.

Summing It Up

The birthday rule was established by health insurance companies to minimize the hassles that are often associated with insuring children when the children are covered under both parents’ plans.

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