Coordination of Benefits. Adding my employer’s plan at no cost in addition to my wife’s current employer plan. How does each plan calculate deductible and max out of pocket?

I know this is long, but we greatly appreciate anybody's input! I just can't find a lot about coordination of benefits as it pertains to crediting deductibles and out-of-pocket limits.

My family: Me, spouse, two children.

Situation summary: We currently have a family health insurance plan through my wife's employer. I just started a job that offers an ICHRA (individual coverage health reimbursement arrangement) in lieu of a standard group plan. The maximum amount the employer will contribute through the ICHRA is $1,845/mo. for a family policy, which is a high enough monthly contribution that I can get almost any family plan on the marketplace at no cost to us, including some good Gold Tier plans. Since there are no PPO plans available on the marketplace, however, we still want to keep my spouse's policy for its nationwide PPO, primarily because my spouse has a genetic heart condition, and we don't want to be too limited on where we go for any future surgeries and treatments. Secondarily, you never know what the future might bring with any of us (cancer diagnosis, etc.) that may lead us to want to go somewhere out of our local area (Cleveland Clinic, Mayo, etc.).

However, adding a plan through my employer would be at no additional cost, so we are considering getting a plan for double coverage that we hope would complement my spouse's policy quite well and reduce our out-of-pocket costs significantly compared to what they are only under my wife's plan. I've done quite a bit of research into coordination of benefits ("COB"), but I want to confirm my understanding. It seems that double insurance coverage wouldn't make a lot of sense if the policies have similar coverages, but if they are different enough, then it could pay off, which I believe would be the case with us. I think my largest concern is how deductible and out-of-pocket limits are calculated and how payment of claims occurs when a deductible or out-of-pocket limit has been met on one plan but not the other. We greatly appreciate any assistance!

Spouse's employer plan: Anthem BlueCross PPO. Nationwide network. Family coverage. HDHP (just barely). We currently max out HSA. $3,200 family deductible. $7,350 family out-of-pocket limit. No per-person deductible or out-of-pocket limit. 20% coinsurance after deductible. $25/$50/$100 maximum prescription coinsurance for Tier 1/2/3 drugs. We pay $690/mo. premium through her payroll deduction, so her employer obviously picks up most of the cost of this nice policy. While we like the low out-of-pocket family limit, we don't enjoy having to pay full price until we meet our deductible.

My employer plan (if elected): BlueCross BlueShield HMO. No referrals required. Local network. Family coverage. Gold Tier rating. Non-HDHP. $1,600/person deductible. $3,000 family deductible. $8,500/person out-of-pocket limit. $17,000 family out-of-pocket limit. $15 copay for PCPs. $30 copay for non-PCP. $30 copay for urgent care. $50 copay for specialists. $400 copay for emergency room visit. $20/$60/$125 prescription copay for Tier 1/2/3 drugs. All copays begin on Day 1 before the deductible is met. 25% coinsurance after deductible. The BCBS local network, of course, is very robust and encompasses virtually all providers, including all local primaries, specialists, urgent cares, and emergency rooms that our family currently sees or might want to see in our usual course of care. Employer would 100% of the premium through its ICHRA.

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My analysis and assumptions for confirmation:

Because my plan is not a HDHP, we would have to stop contributing to our HSA and switch to an FSA (likely at a much lower amount). My birthday is first, so my employer plan would be the primary for me and our two children. My spouse's employer plan would be the primary for my spouse. The COB language for my employer's plan looks to follow the NAIC's model COB language. Notably, it states: Benefits payable under the plan, when combined with benefits paid under the other plan's coverage, will never exceed either carrier's payment arrangement amount. The primary plan pays according to its terms of coverage and without regard to the benefits provided under any other plan. The secondary plan will then calculate the benefits it would have paid in the absence of other coverage and apply that calculated amount to any allowable expense under the secondary plan that is unpaid by the primary plan. The secondary plan may then reduce its payment so that, when combined with the amount paid by the primary plan, the total payment between both plans does not exceed the total allowable expense. The secondary plan will credit the deductible any amounts it would have credited to its deductible in the absence of other coverage. We cannot locate my spouse's coverage manual, but because they are also in the BCBS network, I assume their COB language is the same as my potential BCBS policy. However, we will confirm this before making a final decision. I also assume the allowable expense under either plan is the same (or close to the same) for any given provider since both are BCBS plans. Even if slightly different, I don't think it would change my calculations by much.

Scenario analysis:

Scenario 1: January 3. First visit of the year for any family member. One of my children goes to their PCP for a sick appointment. My insurance is primary.

Total allowable expense under my plan is $165. My plan pays $150, leaving the $15 PCP copay. $15 is credited to the applicable per-person and family deductibles and out-of-pocket limits under my plan. The claim is then submitted to my spouse's plan as secondary coverage. Total allowable expense under my spouse's plan is also $165. My spouse's plan pays $0, because we have not yet met the deductible for any coinsurance. $165 is credited to my spouse's plan's family deductible and out-of-pocket limit, because that is the amount it would have credited in the absence of other coverage. We pay a total of $15. My plan pays $150. My spouse's plan pay $0.

Scenario 2: January 3. First visit of the year for any family member. My spouse has an annual cardiology visit with a cardiologist. My spouse's insurance is primary.

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Total allowable expense under my spouse's plan is $385. My spouse's plan pays $0, because we have not yet met the deductible for any coinsurance, leaving the total $385 in allowable expenses. $385 is credited to my spouse's plan's family deductible and out-of-pocket limit. The claim is then submitted to my plan as secondary coverage. Total allowable expense under my plan is also $385. My plan pays $335, leaving the $50 specialist copay. $50 is credited to the applicable per-person and family deductibles and out-of-pocket limits under my plan, as that is the amount it would have credited in the absence of other coverage. We pay a total of $50. My plan pays $335. My plan spouse's plan pays $0.

Scenario 3: January 3. First visit of the year for any family member. One of my children has an ear tube surgery. My insurance is primary.

Total allowable expense under my plan is $8,000. My plan pays $4,800 toward the claim ($8,000 – $1,600 per-person deductible = $6,400 x 75% = $4,800), with $3,200 in expenses remaining. Under my plan, we have now met the $1,600 per person deductible for my child, as well as the $3,000 family deductible. $3,200 is credited to the applicable per-person and family out-of-pocket limits under my plan ($1,600 deductible + $1,600 coinsurance = $3,200). The claim is then submitted to my spouse's plan as secondary coverage. Total allowable expense under my spouse's plan is also $8,000. My spouse's plan calculates that, in the absence of other coverage, it would normally pay $3,840 toward the claim ($8,000 – $3,200 family deductible = $4,800 x 80% = $3,840), but then reduces its actual payment toward the claim to $3,200, so that, when combined with the amount paid by my plan, the total payment between both plans does not exceed the total allowable expense of $8,000 ($8,000 – $4,800 paid by my plan = $3,200). Under my spouse's plan, we have now met the $3,200 family deductible. $4,160 is credited to our family out-of-pocket limit under my spouse's plan, because that is the amount it would have credited in the absence of other coverage ($3,200 deductible + $960 coinsurance = $4,160). We pay a total of $0. My plan pays $4,800. My spouse's plan pays $3,200.

Scenario 4: February 3. Second visit of the year for any family member. Assume this is after my child's ear tube surgery in Scenario 3 above. My spouse is getting an annual echocardiogram with cardiology stress test. My spouse's insurance is primary.

Total allowable expense under my spouse's plan is $4,000. We met the $3,200 family deductible under my spouse's plan during the above ear tube surgery, so my spouse's plan pays $3,200 toward the claim ($4,000 x 80% = $3,200), with $800 coinsurance remaining. With the family deductible already met under my spouse's plan, $800 is credited to our family out-of-pocket limit under my spouse's plan. The claim is then submitted to my plan as secondary coverage. Total allowable expense under my plan is also $4,000. We met the $3,000 family deductible under my plan during the above ear tube surgery, so, my plan calculates that, in the absence of other coverage, it would normally pay $3,000 toward the claim ($4,000 x 75% = $3,000), but then reduces its actual payment toward the claim to $800, so that, when combined with the amount paid by my spouse's plan, the total payment between both plans does not exceed the total allowable expense of $4,000 ($4,000 – $3,200 paid by my spouse's plan = $800). With the family deductible already met under my plan, $1,000 is credited to the applicable per-person and family out-of-pocket limits, because that is the amount it would have credited in the absence of other coverage ($1,000 coinsurance). We pay a total of $0. My spouse's plan pays $3,200. My plan pays $800.

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Scenario 5: March 3. Third visit of the year for any family member. Assume this is after my child's ear tube surgery in Scenario 3 above and after my spouse's annual cardiology tests in Scenario 4 above. I have to have abdominal sugery. My insurance is primary.

Total allowable expense under my plan is $20,000. We met the $3,000 family deductible under my plan during the two above scenarios, so my plan pays $15,000 toward the claim ($20,000 x 75% = $15,000), with $5,000 coinsurance remaining. With the family deductible already met under my plan, $5,000 is credited to the applicable per-person and family out-of-pocket limits. The claim is then submitted to my spouse's plan as secondary coverage. Total allowable expense under my spouse's plan is also $20,000. We met the $3,200 family deductible under my spouse's plan during the two above scenarios, and have only $2,390 before we meet our family out-of-pocket limit under my spouse's plan, so, my spouse's plan calculates that, in the absence of other coverage, it would normally pay $17,610 toward the claim ($20,000 – $2,390 remaining out-of-pocket = $17,610), but then reduces its actual payment toward the claim to $5,000, so that, when combined with the amount paid by my spouse's plan, the total payment between both plans does not exceed the total allowable expense of $20,000 ($20,000 – $5,000 paid by my plan = $5,000). Under my spouse's plan, we have now met the family out-of-pocket limit after $2,390 is credited to my spouse's plan's out-of-pocket limit from this surgery ($4,160 from Scenario 3 + $800 from Scenario 4 + $2,390 = $7,350), because that is the amount it would have credited in the absence of other coverage. We pay a total of $0. My plan pays $15,000. My spouse's plan pays $5,000. Now that we have met the out-of-pocket limit under my spouse's plan, it should cover all of my spouse's expenses and any remaining amounts from my and our children's expenses, even copays under my plan. submitted by /u/Successfulbeast2013
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