What Is COB? A Simple Guide for Parents and Providers

Families today often rely on more than one health insurance plan. A child may be covered under both parents’ policies, or a family may use Medicaid alongside a private plan to reduce out-of-pocket costs. Providers see this every day in ABA therapy, speech therapy, occupational therapy, and general pediatric care. This is also why COB health insurance checks have become a routine part of therapy billing.

But here’s the challenge—when more than one plan is active, who pays first?

That question affects everything from claim approval to how quickly a provider gets reimbursed. This is where coordination of benefits (COB) becomes essential. Understanding COB insurance helps parents avoid unexpected bills, and it helps providers prevent unnecessary denials caused by outdated insurance information.

What Is Coordination of Benefits?

Coordination of benefits, or COB, is simply the way insurance companies figure out how to split the cost when someone has more than one active health plan. Instead of both plans paying blindly, COB lays out who pays first and who steps in after. The primary plan handles the claim upfront, and the secondary plan reviews whatever balance is left.

A quick example

A child receiving ABA therapy might be covered under both parents’ employer insurance. COB rules decide which parent’s plan pays the ABA claim first. The secondary plan then reviews what’s left and contributes according to its policy. These rules are part of the broader primary and secondary insurance rules that insurers follow.

Understanding the COB meaning in insurance is important because incorrect COB information is one of the top reasons claims are denied in pediatric and therapy practices every month. If you want a clearer explanation of how COB helps avoid these problems, you can look at our full guide.

How Does Coordination of Benefits Work

When someone is covered under more than one health insurance plan, COB rules decide the order in which those plans step in to pay. The primary insurance plan takes the first shot at the claim and pays whatever amount it’s responsible for. After that, the secondary insurance plan reviews what’s still unpaid and covers the rest based on its own limits and policies. Let’s break it down. These details fall under the bigger idea of COB for insurance and how payers coordinate behind the scenes.

Imagine your doctor visit costs $250.

• The primary insurance processes the claim first. Maybe it pays $200.

• The secondary insurance then looks at the remaining $50 and pays some or all of it, depending on the plan rules.

This is where core COB rules apply:

• Total payments cannot exceed 100% of the bill.

• Families may still owe deductibles, copayments, or coinsurance.

• The secondary plan isn’t required to match whatever the primary doesn’t cover it simply pays based on its own coverage limits.

When families ask how coordination of benefits works, this two-step payment process is the heart of COB.

How COB Helps Providers and Families

When handled correctly, COB in medical billing provides major benefits to both sides of the healthcare system.

For Families

• Lower out-of-pocket costs: The secondary plan often covers the part the primary plan did not pay.

• More complete coverage: Two plans can help cover services that only one plan may partially cover.

• Fewer surprises: When COB is updated, the claims process cleanly with fewer denials.

For Providers

• Consistent reimbursements: Claims are less likely to be delayed or denied due to incorrect insurance orders.

• Cleaner claim cycles: Proper COB billing reduces manual rework and resubmissions.

• Better transparency: Providers can request accurate EOBs and understand the distribution of payments between plans.

A well-maintained COB setup helps maintain continuity of care, especially for children needing weekly or intensive therapy services. Providers who want to strengthen their billing workflow beyond COB can explore our ABA Billing Playbook, which covers best practices for faster, cleaner claim cycles.

Common COB Rules Parents and Providers Should Know

A few key coordination of benefits rules play a big role in whether therapy claims get paid on time or end up denied. Understanding these basics helps families avoid surprise bills and gives providers a clearer path to clean claims.

Who Pays First

COB starts with figuring out which plan is primary. For kids covered under both parents, insurers often use the birthday rule. If the wrong plan is billed first, the claim is usually denied right away.

Plans Can’t Pay More Than the Total Bill

Insurance plans can split the cost, but the combined payments can’t go over 100 percent of the charge. If the numbers don’t line up, the claim is flagged or rejected.

What the Secondary Plan Really Covers

The secondary plan steps in only after the primary pays its share. It covers what it can based on its own limits, not whatever is left on the bill. This is where patient responsibility can still show up.

Keeping Insurance Information Current

Many denials happen because the COB information is old or incomplete. Providers need to know which plans are active before sending claims out the door.

Deductibles and Cost-Sharing Still Apply

Even with two plans, families may still owe copays, coinsurance, or deductibles. Secondary plans don’t always cover these amounts.

Claims Need Correct COB Details

Each claim must clearly list the primary and secondary payer. If required, the EOB from the primary plan has to be attached. Missing information almost always leads to delays.

Special Rules for Medicaid

Medicaid is usually the last payer, which means it only reviews a claim after all other plans pay. If the COB setup isn’t correct, Medicaid claims get rejected quickly. Medicare crossover claims are important for providers to understand, especially when working with government plans, so we’ve created a simple walkthrough to help you handle them with ease.

Extra Considerations for Therapy Services

ABA, speech, OT, and PT claims see more COB issues than most fields. Frequency limits, documentation needs, and incorrect payer order all add to delays if the information isn’t coordinated well. Many billing delays happen because of authorization issues. Fixing these problems early can help you avoid unnecessary setbacks.

FAQ

1. What's the difference between EOB and COB?

An EOB explains how a claim was processed and what the patient owes. COB decides which insurance plan pays first when a person has more than one policy.

2. What is the coordination of benefits (COB) intended for?

COB makes sure two insurance plans don’t pay the same claim twice. It sets the correct payment order, prevents overpayment, and helps families avoid billing errors or unnecessary costs.

3. What are common cob mistakes?

Common mistakes include not updating coverage details, ignoring COB forms, misunderstanding primary and secondary rules, and failing to share new insurance cards with providers, causing delays or denied claims.

Conclusion

Understanding what is coordination of benefits and how it affects your health claims is essential for parents and providers. Proper COB prevents denials, reduces financial stress, and ensures that therapy services continue without unnecessary interruptions. Whether you're managing a child’s coverage under two plans or handling billing for a therapy practice, keeping COB information accurate is key to smoother, faster, and more reliable claim processing.

If you’re planning to launch a new practice and want to build a strong billing foundation from day one, our guide on starting your own ABA clinic can help you get set up the right way.