What does a "coordination of benefits" clause in Colorado health policies determine?

A "coordination of benefits" clause is a key provision in health insurance policies that comes into play when an individual is covered by more than one health plan. This clause helps to determine how benefits will be paid out when there are multiple insurers involved, ensuring that the total payments from all policies do not exceed the total amount of the medical expenses incurred.

In simpler terms, if a person has two health insurance policies, the coordination of benefits clause establishes which insurer will pay first (known as the primary insurer) and which one will pay any remaining balance (the secondary insurer). This is crucial for preventing overpayment or duplication of benefits, allowing for a streamlined payment process while ensuring that the insured receives the maximum entitled coverage.

Premium calculation, limitations on benefits per insurer, and reimbursement processes are related to how insurance operates but do not specifically address the interplay between multiple policies, which is the primary focus of the coordination of benefits clause.