What is the primary purpose of the coordination of benefits (COB) provision?

The primary purpose of the coordination of benefits (COB) provision is to avoid duplication of benefit payments. This provision is crucial in situations where an individual is covered by multiple insurance plans. By coordinating the benefits offered by each policy, insurance companies can ensure that the total amount reimbursed does not exceed the actual medical expenses incurred by the insured. This helps in maintaining the integrity of the insurance system, allowing for fair and equitable distribution of benefits among the various insurers involved.

This process ensures that one plan pays its benefits first, while the other may pay the remaining balance, up to the limits of coverage. As a result, it prevents an individual from profiting financially from multiple claims for the same medical service, thereby keeping insurance premiums more stable and manageable for policyholders overall.