When both a group and individual plan are held by an employee, which is typically primary?

In scenarios where an employee is covered by both a group health plan and an individual health plan, the group plan is typically designated as primary. The primary plan pays benefits first, and any remaining costs may then be covered by the secondary plan. This standard prioritization is based on the principle that group plans are designed to cover a larger number of individuals and are often negotiated at lower rates, providing more cost-efficient coverage.

The rationale for this approach lies in the collective bargaining agreements made by employers with insurance providers to establish group plans, which often come with specific terms regarding coordination of benefits. Since the group plan is established through an employer's arrangement, it generally takes precedence when determining which insurance will pay for healthcare services first. Additionally, group plans are intended to provide broad coverage across multiple members, reinforcing their primary status in these situations.

Understanding this hierarchy is essential for both employees and providers because it impacts how claims are filed and how benefits are reimbursed. If an employee has both a group and an individual policy, knowing which plan is primary informs the employee of their responsibilities regarding copayments, deductibles, and how much coverage might come from each plan.