Group Administrator's Manual

Coordination of Benefits (COB)

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COB Savings

Coordination of Benefits (COB) savings is the difference charged to the utilization of the group based on Arkansas Blue Cross and Blue Shield's status as the primary payer versus the secondary payer.

For example, if one of the employees had a $1,000 claim, and Arkansas Blue Cross is the primary payer, we would pay 80 percent or $800 (assuming the coinsurance is 80 percent, the deductible has been met and the charge is less than the maximum allowance set by Arkansas Blue Cross).

Example 1

Arkansas Blue Cross as Primary Payer

Arkansas Blue Cross would pay 80 percent

• $1,000 x 80% = $800

If Arkansas Blue Cross is the primary payer, we will pay contract benefits (80 percent). In the above example, $800 would be the 80 percent contract benefit.

Example 2

Arkansas Blue Cross as Secondary Payer

The other insurance company would pay 80 percent *

• $1,000 x 80% = $800

Arkansas Blue Cross pays the difference

• $1,000 - $800 = $200

Charge $1,000 Our allowance $800
Other paid $   800 We pay $200
Balance $   200

* Other insurance companies may or may not pay 80 percent

Remember, the COB savings is the difference charged to the utilization of the group based on Arkansas Blue Cross' payment status. Therefore, in Example 2, instead of $800 being charged to the utilization of the group, only $200 is charged at a COB savings of $600.


COB Letters

In order to determine Arkansas Blue Cross’ liability (primary or secondary payer); our Coordination of Benefits (COB) Division will mail letters to your employees asking for assistance. Because the requested information plays a role in determining your group's utilization, it is important that these letters are completed and returned as soon as possible.

If we have not received a response in 15 days, the claim(s) will be denied until the requested information is received.

Listed below are some examples of the most common COB letters:

  • Our letter labeled C-00010 asks if dependents or the employee are covered by any other insurance policy.

  • Once a year, our COB files are updated using the information provided in response to our letter labeled C-00020; it asks if there have been any changes in your employees' coverage by other insurance companies.

  • Our letter labeled C-00030 asks for clarification of custody in regard to the insurance of your employees' children. (In case of divorce, the parent with custody of the child is primary unless the court has declared otherwise.)

Please encourage your employees to respond as quickly as possible to the COB letters. We are grateful for the opportunity to serve your employees, and it helps us serve them with the right information available.