What is the purpose of the Coordination of Benefits clause found in group health master contracts?

The purpose of the Coordination of Benefits (COB) clause in group health master contracts is to prevent the situation where an insured could receive duplicate payments for the same medical expense due to having multiple health insurance coverages. When an individual is covered by more than one health insurance plan, the COB clause establishes the order in which the plans will pay their benefits. This helps to ensure that the combined payouts do not exceed the actual cost of the medical services received.

Without a COB provision, an individual with multiple health plans could potentially submit a claim to more than one insurer and receive full benefits from both, leading to overpayments and potentially exploiting the system. The coordination of benefits thus provides a structured approach to determine which insurer is the primary payer and which is secondary, effectively managing claims and payments while protecting the integrity of health insurance coverage.