Coordination of benefits and the birthday rule: which plan pays first at intake

1. Why COB matters at intake

A coordination of benefits denial is one of the easiest to prevent. A claim sent to the wrong plan first comes back with reason code 22 ("this care may be covered by another payer per coordination of benefits"), and a plan that thinks there's other coverage may hold every claim until the member updates their record. By then the authorization may have been requested from the wrong plan too, and the clock on the primary's filing deadline is running.

The fix is a few questions at the first call and a verification on each plan, not just the card the client handed you. The order matters before admission because the primary plan's network, authorization rules and deductible are the ones that control what the client pays. The VOB checklist covers everything else to verify.

2. The order of benefit rules

The National Association of Insurance Commissioners' Coordination of Benefits Model Regulation sets a uniform order of benefit determination. Texas's version is 28 TAC §3.3507, which TDI amended in 2024 (adoption order). Apply the rules in order; the first one that decides it ends the question.

Step	Rule	Primary	Secondary
1	No COB provision	A plan with no COB clause consistent with the rule (unless both plans say the complying plan is primary)	The plan that has one
2	Non-dependent or dependent	The plan covering the person as an employee, member, subscriber, policyholder or retiree	The plan covering them as a dependent. Medicare's rules can reverse this for some Medicare beneficiaries (example 6 below).
3	Dependent child	Parents married or living together: the parent whose birthday falls earlier in the calendar year. Otherwise, the court decree or custody order (next section).	The other parent's plan
4	Active or inactive employee	The plan covering the person as an active employee (not laid off or retired), or as that employee's dependent	The plan covering them as a retired or laid-off employee, or that person's dependent
5	COBRA or state continuation	The plan covering the person as an employee, member, subscriber or retiree, or their dependent	The COBRA or state continuation coverage
6	Longer or shorter coverage	The plan that has covered the person longer	The newer plan
7	None of the above	Neither: the plans share the allowable expenses equally	Neither

The primary plan pays its benefits as if the secondary didn't exist. How much the secondary then pays depends on its own COB method, so ask its rep how it calculates secondary payment; don't assume it picks up the whole balance.

3. Children: the birthday rule and divorced parents

The birthday rule. When a child is covered by both parents' plans and the parents are married or living together (whether or not they were ever married), the primary plan is the one belonging to the parent whose birthday comes first in the calendar year. Only the month and day count, never the year: a parent born April 2, 1990 comes before one born September 9, 1975. If both parents share a birthday, the plan that has covered a parent longer is primary.

Parents divorced, separated or not living together:

1. A court decree that makes one parent responsible for the child's health care expenses or coverage: that parent's plan is primary, once the plan knows about the decree.
2. A decree that makes both parents responsible, or gives joint custody without saying who covers health care: use the birthday rule.
3. No decree: the custodial parent's plan, then the custodial parent's spouse's plan, then the non-custodial parent's plan, then the non-custodial parent's spouse's plan.

Texas's rule defines the custodial parent as the parent with the right to designate the child's primary residence under a court order (under the Texas Family Code or other law), or, without an order, the parent the child lives with for more than half the calendar year, not counting temporary visits (28 TAC §3.3507 as adopted). For an adolescent intake, ask which parent the child lives with, whether there's a decree that addresses health insurance, and get a copy if there is. Who can consent to treatment and sign releases is a separate question with its own answer in the decree.

4. Worked examples

Made-up clients, to show the rules at work.

Client	Coverage	Primary	Why
1. Maya, 15	Mom's employer plan (mom born March 3) and dad's employer plan (dad born November 20); parents married	Mom's plan	Birthday rule: March comes before November. Ages don't matter.
2. Leo, 12	Lives with dad most of the year; dad's plan, stepmom's plan, mom's plan; divorce decree silent on health insurance	Dad's plan, then stepmom's, then mom's	No decree on coverage: custodial parent, then custodial parent's spouse, then the other parent.
3. Leo again	Same, but the decree orders mom to provide health insurance	Mom's plan	The decree controls once mom's plan knows about it, even though Leo lives with dad.
4. Sam, 24	His own employer plan, and still on a parent's plan	His own plan	The plan covering him as an employee pays before the plan covering him as a dependent.
5. Ana, 41	COBRA from her last job, and a new employer plan that started this month	The new employer plan	Both plans cover her as the employee, so rule 2 doesn't decide it; the COBRA rule makes the plan covering her as an active employee primary.
6. Ray, 67	Retired, with Medicare and his former employer's retiree plan, and also covered as a dependent on his wife's plan at a 200-person company where she still works	His wife's plan, then Medicare, then the retiree plan	Medicare is secondary to a current-employment plan from an employer with 20 or more employees, and primary to retiree coverage, so the usual employee-before-dependent order is reversed between the two private plans.
7. Dee, 30	An employer plan and Texas Medicaid	The employer plan	Medicaid pays after every other liable payer.

Example 5 trips teams up: the rule that COBRA is secondary only matters when both plans cover the person the same way. If her old employer's COBRA covered her as an employee and the new plan covers her as a spouse's dependent, rule 2 would make COBRA primary. Ask how each plan covers the client, not just which plans they have.

5. Medicare: who pays first

Medicare doesn't follow the NAIC order; federal Medicare Secondary Payer law decides. The cases that come up at behavioral health intake (CMS, Medicare Secondary Payer; Medicare.gov, who pays first):

Situation	Pays first	Pays second
65 or older, covered through their own or a spouse's current employment, employer with 20 or more employees	The employer plan	Medicare
Same, employer with fewer than 20 employees	Medicare	The employer plan
Under 65 with Medicare because of a disability, covered through their own or a family member's current employment, employer with 100 or more employees	The employer plan	Medicare (below 100 employees, Medicare is primary unless the plan is a multi-employer plan with at least one employer of 100 or more)
Medicare because of end-stage renal disease	The group health plan, for a 30-month coordination period, whatever the employer's size or the person's job status	Medicare; after the 30 months, Medicare is primary
Retiree coverage	Medicare	The retiree plan
COBRA	Medicare (except during the ESRD coordination period, when COBRA pays first)	COBRA
An injury covered by workers' compensation, no-fault or liability insurance	That insurance, for care related to the injury	Medicare
TRICARE	TRICARE if the person is on active duty; otherwise Medicare	The other
Medicaid	Medicare (and any other coverage)	Medicaid, last

The Medicare eligibility response lists the policies Medicare has on file as primary to it for the dates you asked about, so a Medicare check is also a COB check. Our guide to Medicaid and Medicare eligibility checks covers how to run one. Which Medicare covers IOP and PHP at all is on our sister site's Medicare IOP and PHP guide.

6. Medicaid: payer of last resort

Federal law makes Medicaid the payer of last resort: states must take all reasonable measures to find other parties legally liable for a member's care, and those parties pay first (Social Security Act §1902(a)(25), 42 U.S.C. 1396a(a)(25)). CMS's coordination of benefits and third party liability handbook lists who counts: self-insured plans, group health plans, managed care organizations and pharmacy benefit managers, plus workers' compensation, auto and liability insurance. A few federal programs, such as the Indian Health Service and Ryan White, pay after Medicaid by statute.

• Medicare first. TMHP's manual says Medicare is primary to Texas Medicaid, so a dual-eligible client's claims go to Medicare first (TMPPM Section 4).
• Other insurance first. A Texas Medicaid eligibility check shows other insurance on file; bill it first, then send Medicaid or the Medicaid health plan the claim with the primary's payment or denial.
• A primary can't refuse only for a missing prior authorization. Under the Consolidated Appropriations Act, 2022, states must have laws that stop liable third parties from refusing to pay a claim solely because the service didn't get prior authorization under the third party's rules; CMS explains the conditions in its 2023 letter to state Medicaid directors.

7. Which rules apply to which plan

Plan	Whose COB rules
Fully insured group plan regulated by TDI	28 TAC §3.3507
Self-funded employer plan (ERISA)	The plan document's COB section (state insurance rules don't reach it). Ask for the summary plan description's COB section if the plans disagree.
Out-of-state insured plan	The rules of the state where the policy was issued, often based on the same NAIC model.
Medicare	Medicare Secondary Payer law (above)
Medicaid and CHIP	Payer of last resort (above)

Which plans are TDI-regulated is covered in TDI's fully insured vs self-insured explainer; ask the rep. When two plans each think the other is primary, the client is the one who has to settle it with both, so tell them early.

8. The intake questions

Ask everyone, every time, including clients who "only have one insurance":

"Besides this card, are you covered by any other health plan? That includes a spouse's or parent's plan, a plan from a second job, COBRA from an old job, a student plan, Medicare, Medicaid or CHIP, or TRICARE."

For each plan, write down:

• The plan name, member ID and group number, and the subscriber's name and date of birth (the month and day decide the birthday rule).
• How the client is covered: as the employee, the spouse, a child, a retiree, or under COBRA, and the date coverage started.
• For employer plans: whether the subscriber is still working there, and roughly how many employees the employer has (20 and 100 are the Medicare lines).
• For a child of separated parents: who the child lives with, and whether a court decree says who provides health insurance. Get a copy.
• For Medicare: why the client has it (age, disability or ESRD), and the Medicare card.
• For a recent injury: whether an accident or work injury is involved.

Then verify each plan on its own. The electronic eligibility response often lists other coverage the plan knows about; our guide to reading a 271 shows where. If a plan's record shows other coverage the client says has ended, the client needs to call that plan and update it before the first claim. The printable VOB form has room for a second plan, and the VOB call script has the words for the rep: "Do you show any other coverage on file for this member, and which plan do you show as primary?"

Get authorization from the primary plan, and ask the secondary whether it needs its own. Authorization rules are in the prior authorization guide.

9. Fixing a COB denial

1. Read the reason code. CARC 22 means the plan thinks another payer is primary. Our guide to reading an EOB covers the codes; on a secondary claim, OA-23 is the primary's payment or adjustment.
2. Find out what the plan has on file. Call and ask which other plan it shows and since when.
3. Have the client update both plans. In our experience plans often hold claims until the member confirms their other coverage, and the member usually has to make that call.
4. Bill the primary, then the secondary with the primary's payment information (from the 835 or EOB).
5. Watch the filing deadlines on both plans; a COB mix-up doesn't stop the clock. Our sister site lists timely filing limits by payer and other behavioral health claim denials.

How Quick VOB helps

Quick VOB checks each card on its own, from a photo, so a second plan gets its own verification instead of a guess. "Log the call" keeps what each plan's rep said about other coverage and which plan it shows as primary, with their name and reference number, and the PDF goes into the chart with both plans side by side.

Questions

What is the birthday rule for insurance?

When a child is covered by both parents' plans and the parents are married or living together, the plan of the parent whose birthday (month and day, not year) comes first in the calendar year pays first. If the parents share a birthday, the plan that has covered a parent longer is primary.

Which insurance is primary for a child with divorced parents?

A court decree that makes one parent responsible for health coverage decides it. If the decree makes both responsible or gives joint custody without saying, use the birthday rule. With no decree, the custodial parent's plan is primary, then that parent's spouse's, then the other parent's, then that parent's spouse's.

Is COBRA primary or secondary?

Against another plan that covers the person the same way (for example, as an employee), COBRA is secondary. Against Medicare, Medicare pays first for people with Medicare because of age or disability; COBRA pays first only during the 30-month coordination period for end-stage renal disease.

If I have Medicare and insurance through work, which pays first?

If you're 65 or older and covered through your or your spouse's current job at an employer with 20 or more employees, the employer plan pays first. With fewer than 20 employees, Medicare pays first. For Medicare because of a disability, the line is 100 employees.

Is Medicaid primary or secondary?

Medicaid pays last. Medicare and any other health insurance or liable party pay first, and Medicaid or the Medicaid health plan is billed after them.

What does "claim denied due to coordination of benefits" mean?

The plan believes another payer should pay first, usually reason code 22. Check which other coverage the plan has on file, have the client update it if it's wrong, bill the primary, then send this plan the claim with the primary's payment information.

Does the birthday rule use the parent's age?

No. Only the month and day count. A younger parent whose birthday is in January is primary over an older parent whose birthday is in June.

What if a plan has no coordination of benefits clause?

Under the NAIC model and Texas's rule, a plan without a COB provision consistent with the rule is primary, unless both plans say the complying plan is primary.

Sources

1. National Association of Insurance Commissioners, Coordination of Benefits Model Regulation (MDL-120). naic.org
2. 28 Tex. Admin. Code §3.3507, Rules for COB and order of benefits; Texas Department of Insurance, adoption order (2024). law.cornell.edu · tdi.texas.gov
3. CMS, Medicare Secondary Payer (MLN006903, July 2025) and Medicare Secondary Payer Manual, Chapter 2. cms.gov · cms.gov
4. CMS, End-stage renal disease and Medicare Secondary Payer. cms.gov
5. Medicare.gov, Who pays first? medicare.gov
6. Social Security Act §1902(a)(25) (42 U.S.C. 1396a(a)(25)); CMS, Coordination of Benefits and Third Party Liability in Medicaid handbook; CMS, State Medicaid Director Letter 23-002. ssa.gov · medicaid.gov · medicaid.gov
7. TMHP, Texas Medicaid Provider Procedures Manual, Section 4: Client Eligibility (April 2026). tmhp.com
8. Texas Department of Insurance, Fully insured vs. self-insured. tdi.texas.gov

The clients are made up. This guide is general information, not legal or billing advice. Cima isn't a law firm. Plan documents and payer policies differ; when two plans disagree, each plan's documents and the regulator decide.