What is the birthday rule for insurance?
The birthday rule in medical billing is used by health insurance companies to decide which plan will pay first if both you and your spouse have separate health insurance plans and you have children covered by both policies.
It isn’t a law, but it’s a standard practice that determines which plan is the primary plan, and which should be secondary.
How does the birthday rule work?
If you and your spouse have separate health insurance plans and you have listed your kids as dependent on both plans, then the primary insurance will pay for the treatment first. And if there are still any outstanding bills, then the secondary plan will cover up to 100% of the remaining cost.
The birthday rule places primary responsibility for your children based on whether you or your spouse was born earlier in the year. The year of birth doesn’t matter. It’s the month and day that plays into the birthday rule.
What if you and your spouse have the same birthday? In this circumstance, the plan that’s been in place longer is primary.
Are there exceptions to the birthday rule?
There are a lot of different situations in which the birthday rule doesn’t apply. The main one to remember is that a court order will always override the birthday rule. Here are a few other situations to consider.
| Situation | Does the birthday rule apply? |
|---|---|
| Parents divorced or legally separated | Depends on custody arrangement |
| Custodial parent remarries | No |
| One parent has COBRA | No |
| Newborn | Yes |
| Young adult with parent’s and spouse’s insurance | No |
Legally separated or divorced
If you’re legally separated or divorced and not remarried, the person with primary custody provides primary healthcare coverage for dependents. With joint custody, the birthday rule applies.
However, this stipulation only applies if a group plan covers both parents. If the parent with primary custody has an individual plan and the non-custodial parent has a group plan, the non-custodial parent’s health plan is primary.
Custodial parent is remarried
If you remarry, coverage works like this:
- Your plan provides primary coverage
- Your new spouse’s plan provides secondary coverage
- Your ex-spouse’s plan fills any remaining coverage gaps
One parent has COBRA insurance
If you have COBRA and an employer-sponsored group health plan covers your current or former spouse, they provide primary coverage. COBRA insurance offers continuation coverage that’s more expensive than a health plan offered through work for an active employee.
For a newborn
When a baby is born, the mother’s insurance will cover the delivery and related costs. A newborn is automatically covered under the parent’s policy for 30 days, after which they need to be added. When each parent has their own policy, the birthday rule will apply.
A young adult is covered under a parent’s and spouse’s plan
The birthday rule doesn’t apply in this case. Instead, the plan that has been covering the young adult for the longest period of time will be primary. A young adult can stay on a parent’s plan until age 26.
Do all health plans follow the birthday rule?
Not all plans follow the birthday rule. It’s not a law but a common claims practice that helps insurers figure out who pays claims.
This means it's essential that you read your health insurance policies carefully and work with your insurance companies to understand how the insurer coordinates benefits. It's a good idea to determine which plan is primary before you start incurring medical costs.
Contact your health plan if you can’t figure out how the birthday rule affects your insurance and which insurer pays first.
Silver plans provide a good balance of monthly premiums with out-of-pocket costs. Coinsurance is 70% with a silver plan, meaning you will pay 30% of the costs after your deductible is met, up to the out-of-pocket limit. Silver plans are a good choice for people who are in generally good health but don't want high out-of-pocket costs if something goes wrong. Bronze plans are a popular choice with those who value low monthly premiums and are willing to pay more when they need care. Coinsurance is set at 60%, meaning you will pay 40% if you do need care, up to the out-of-pocket limit. Bronze plans are good for those who don't expect to need many services outside of preventative care throughout the year.
ACA platinum plans have the highest monthly premiums, but the lowest out-of-pocket costs. You'll pay more monthly in return for lower deductibles, copays and coinsurance amounts. Coinsurance with platinum plans is 90%, which means you pay 10% after the deductible, up to your out-of-pocket limit. Platinum plans are good for those who anticipate a lot of medical needs throughout the year.
Gold plans cost a little less than platinum plans, and come with higher out-of-pocket costs. The coinsurance amount on a gold plan is 80%, which means you pay 20% after the deductible, up to your out-of-pocket limit. A gold plan is a good idea if you think you'll need a lot of care throughout the year, but don't want to pay platinum premiums.Health insurance finder tool
COBRA
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Employer-sponsored health insurance
Preferred-provider Organization (PPOs)
Preferred-provider organization (PPOs) plans are the most common type of
employer-based health plan. PPOs have higher premiums than HMOs and HDHPs, but
those added costs offer you flexibility. A PPO allows you to get care anywhere
and without primary care provider referrals. You may have to pay more to get
out-of-network care, but a PPO will pick up a portion of the costs.
Find out more about the differences between plansHealth maintenance organization (HMO)
Health maintenance organization (HMO) plans have lower premiums than PPOs.
However, HMOs have more restrictions. HMOs don't allow you to get care outside
of your provider network. If you get out-of-network care, you'll likely have to
pay for all of it. HMOs also require you to get primary care provider referrals
to see specialists.
Find out more about the differences between plansHigh-deductible health plans (HDHPs)
High-deductible health plans (HDHPs) have become more common as employers look
to reduce their health costs. HDHPs have lower premiums than PPOs and HMOs, but
much higher deductibles. A deductible is what you have to pay for health care
services before your health plan chips in money. Once you reach your deductible,
the health plan pays a portion and you pay your share, which is called
coinsurance.
Find out more about the differences between plansExclusive provider organization (EPO)
Exclusive provider organization (EPO) plans offer the flexibility of a PPO with
the restricted network found in an HMO. EPOs don't require that members get a
referral to see a specialist. In that way, it's similar to a PPO. However, an
EPO requires in-network care, which is like an HMO.
Find out more about the differences between plans
Learn more about individual insurance plans
Know more individual insurance / ACA 
Know more individual insurance / ACA 
Frequently asked questions
What is coordination of benefits?
Coordination of Benefits (COB) is how two insurance companies work together to cover an insured person. The primary health plan pays the costs first, and then the secondary plan will pick up any remaining costs.
Can both parents have health insurance for a child?
Yes. There’s no law against having a child on two plans, but one plan will always be primary. However, it’s worth examining the plans, coverage, and costs to see if it’s really worth paying for both plans to have secondary coverage.
What are the pros and cons of the birthday rule?
The health insurance birthday rule is an objective way of determining which plan should be primary, making it easy to decide. However, it prevents parents from deciding for themselves which plan is best to cover their children. One plan may have better benefits or work with a provider the other doesn’t.
How can you avoid the birthday rule when it comes to insurance?
The easiest way to avoid the birthday rule is to look at both health plans and decide which is the better choice. Then, move everyone to that plan and drop coverage with the other one.
