Dual cov w/COB or FSA or both?

[FauxFlat]

What is the name of your state (only U.S. law)? Live in Oregon, spouse retiree benefits from CA

Let me apologize ahead of time for this epic and complex question. It shouldn't be this hard.

I hope someone can give us some help as I've talked to two reps from one of the nation's largest health carriers and neither one even knew the correct order of primary/secondary coverage determination until I told them to ask their manager. Now, I'm waiting for that manager to call me since the questions get tougher. Maybe you all can help.

My retired husband and I are currently covered through his CA employer on a PPO with a nationwide preferred provider netwwork. First time in years we haven't been on an HMO and we need to better prepare for OOP costs. His PPO plan has $20 office copays/$500 ded/80% co-ins/$3,000 indiv OOP. On this plan alone, my annual OOP expenses excluding office copays will never be less than $1,200 just because of regular tests that I must have. My husband's OOP costs are almost non-existent but he isn't getting any younger and he's very active so injuries loom.

I can add a POS plan through my own employer with the same carrier. This POS appears to work just like a PPO though there may be a PCP referral requirement. I haven't been able to find the really fine print and am waiting for our benefits rep to contact me. Options for the build-your-own POS are:

office copays: pcp $20/spec $20 -- pcp $25/spec $35 -- pcp $30/spec $45
Deductible:- $200 -- $ 400 -- $750
Pref Prov Co-ins: 95% -- 90%-- 80%
OOP Max -- $4,000 indiv

I also can have a FSA though I've never used one because OOP costs with an HMO were negligible (though I suppose we could have used it for contacts and glasses).

The COB clauses read:
Secondary coverage (husband's plan) -- When this Plan is the secondary carrier, its benefits may be reduced so the combined benefit payments and services of all the plans do not exceed 100% of the Allowable Amount. The benefit payment by this Plan will never be more than the sum of the benefits that would have been paid if you were covered under this plan only.

Primary (POS from my employer and this is from the 2005 booklet) -- Amount of Payment: When a [company] program is the second plan, it will reimburse you only for the difference between what it would have been paid if it were the primary payer and what the other plan actually paid. When a [company] program is the second payer, no benefit is paid unless the amount paid by the primary plan for total charges is less than the benefit that would have been payable by the [company] plan.

So, in the scenario of a $100 allowable bill, both plans having 80% co-ins and deductibles met, my take is that the POS would pay the first $80 and the PPO would pay $20 for a total of $100. However, if the POS were secondary, they would pay nothing after the PPO paid $80. Am I interpreting this correctly?

So, I don't know how to match the POS options against the secondary PPO coverage of $20 office copays/$500 ded/80% co-ins/$3,000 indiv OOP. I'm not worried about the office copay expenses; it's the deductible and co-insurance that hurt. How minimal can I go on the POS and still get a benefit? I don't understand how the deductibles play against each other.

Monthly contribution for me alone is $50 for $30-$45 office copays/$200 ded/80% co-ins/$4,000 indiv OOP. I can drive this lower (down to $26) with a higher deductible but, again, I'm not sure how the deductibles coordinate.

Would I benefit from the POS and a FSA? Just go with the FSA?

Gosh, this is a long, long question but maybe you can advise. Thank you.What is the name of your state (only U.S. law)?

[ecmst12]

Originally Posted by FauxFlat

So, in the scenario of a $100 allowable bill, both plans having 80% co-ins and deductibles met, my take is that the POS would pay the first $80 and the PPO would pay $20 for a total of $100. However, if the POS were secondary, they would pay nothing after the PPO paid $80. Am I interpreting this correctly?

Sounds to me like you are.

For deductibles, if the secondary plan has a deductible, it will usually credit the full allowed amount towards the deductible whether the primary plan paid it or not. But you should check with them on this to be sure.

Don't ask me to do the math about your premium cost vs OOP costs vs FSA savings....not my area of expertise!

[FauxFlat]

Originally Posted by ecmst12

Don't ask me to do the math about your premium cost vs OOP costs vs FSA savings....not my area of expertise!

I don't blame you for running on this one!

Originally Posted by ecmst12

For deductibles, if the secondary plan has a deductible, it will usually credit the full allowed amount towards the deductible whether the primary plan paid it or not. But you should check with them on this to be sure.!

So in your mind, let's say it's Jan 1 and I incur an allowable hospital bill of $1,000 with no deductibles met.

Primary coverage has $200 deductible and Secondary has $500.
Primary plan pays $640 after I pay the first $200 plus 20% of balance ($360).
Secondary plan would consider the $500 deductible met and would pay 80% of $500 balance ($400) except that is greater than 100% of the bill.
Ultimately, I should not be OOP anything.

Talk about difficult math!

Thank you, thank you!

[ecmst12]

Like I said, double check with the secondary plan to make sure this is how they handle the deductible, but if it is, then you are in the clear.

Consider yourself lucky, too, not many plans coordinate benefits in this way to cover all of the OOP costs. Even though it ends up with a lower payout then if the policy was primary, cutting costs in healthcare is such a big deal now, that every bit of savings is being scraped wherever it can be found.