Understanding Medicare and Coordination of Benefits (COB)

Understanding Medicare and Coordination of Benefits (COB)

What happens when I have Medicare and another health plan for myself or my dependent(s)?

It’s important to know how Medicare works with other kinds of health or drug coverage plans and who should pay your bills first. The term Coordination of Benefits applies to a person(s) who is covered by more than one health plan.

What is Coordination of Benefits?

Coordination of Benefits or COB is an insurance payment process that takes place when you or your dependent(s) are covered under more than one health insurance plan. The process determines what health plan will pay first, and the portions your health plans will pay out for medical claims you or your dependent(s) may incur.

Why is it important for me to understand how COB works?

It’s important for you to understand what COB means because it helps you to know which plan is you primary (pays first) and which plan is your secondary (pays second for you and/or dependents.)

I have Medicare and other health or drug coverage. What are those coverages called and how do they coordinate benefits?

Each type of coverage is called a payer. When there’s more than one potential payer, there are coordination rules to decide who pays first.

The first or “primary payer” pays what it owes on your bills, and then sends the remainder of the bill to the second or “secondary payer.” In some cases, there may also be a third payer.

Who do I need to notify about primary and secondary health plan coverage for myself and/or my dependents?

You must notify the HR Benefits Division/Cigna when you and/or your dependent(s) are enrolled in two or more plans. For example:

  • Notify HR Benefits when you and/or your dependent(s) become Medicare-eligible based on age, disability and/or other qualifying circumstances.
  • Notify HR Benefits and/or Cigna when you enroll in Medicare or another health or drug plan.
  • Notify HR Benefits when you enroll in Medicare.

Additionally, you must notify your doctor, hospital, and all other health care providers about all your health or drug coverage to make sure your bills are sent to the right payers, in the right order.

Does COB apply only to Medicare coverage?

No. When you or your dependent(s) are covered under more than health insurance plan, and two or more health insurance plans are responsible for paying the same medical claim for you and/or your dependent(s), COB must take place.

Why must I notify HR Benefits/Cigna when myself and/or my dependent(s) are enrolled in Medicare or become Medicare-eligible?

Insurance companies are required to tell Medicare about insurance coverage they offer people to help coordinate benefits with Medicare.

Why am I required to notify HR Benefits and/or Cigna when I and/or my become Medicare-eligible?

As a condition of continued participation under the City of Houston Benefit Plans, retirees that become Medicare-eligible must:

  • Enroll in Medicare Parts A and B.
  • Provide proof of enrollment.
  • Enroll in one of the City’s Medicare Advantage Plans.

I have questions about COB. Who can I contact?

Please contact HR Benefits for more information:

Cigna in City Benefits Division

832-393-6191 • 832-393-6193 • 832-393-6305


HR Dept