Coordination of Benefits (COB)
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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).
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.
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
* 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.
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.