Can you have two health insurance plans?

Roughly 92% of Americans have some form of health insurance coverage¹. Most individuals only have one health insurance plan, known as “primary” insurance. However, some people also secure additional medical coverage or a “secondary” insurance plan.

Having dual coverage is perfectly legal. But you must coordinate your two policies correctly to ensure you cover your medical expenses compliantly. If you’re new to dual insurance, you’ve come to the right place!

In this blog post, you’ll learn:

• How having two health insurance plans works, including how primary and secondary insurance coordinate to cover your medical expenses.
• The common scenarios in which individuals might benefit from having dual coverage.
• The pros and cons of maintaining two health plans and tips for managing the associated costs effectively.

Why would an individual have two health insurance plans?

Most individuals only have one health plan. However, there are a wide variety of scenarios in which someone might have or need two health insurance plans.

Here are some common examples:

• You’re married, and you and your spouse have an employer-sponsored group health plan from your workplaces.
  • In this case, your plan would cover you individually, and you could be a dependent on your spouse’s plan.
• You’re a student with a university medical plan who is younger than 26 and still participates in your parents’ health policy.
• Children of divorced parents might also have separate health insurance policies—one from each parent.
• You qualify for Medicaid but have your own insurance plan. In this case, Medicaid supplements your coverage.
  • This can be an individual health plan you bought on a public or private health exchange or an employer-sponsored group plan.

How do two health insurance plans work together?

Having two health plans doesn’t mean you’ll receive full medical coverage twice. Instead, one policy will be your primary plan, and the other will be your secondary health coverage. This ensures the total amount your two plans will pay for your health expenses will never exceed 100% of the cost of those expenses.

Coordination of benefits (COB) is the process that decides which insurance pays for a claim first. So, it’s essential to understand the difference between primary and secondary insurance before securing two health plans. Let’s dive into how they work below.

Primary insurance

Your primary plan is your main insurance policy that will cover your medical care first. For example, when you see the doctor or need to buy prescription drugs, your primary insurer will cover the bills up to its coverage limits.

With a primary plan, you may owe cost-sharing fees, such as copayments or coinsurance. You’ll also likely have an annual deductible and an out-of-pocket maximum.

Secondary insurance

Your secondary insurance plan typically only kicks in after your primary insurance reaches its coverage limits. If there’s anything left to pay after your primary insurer covers its portion of your healthcare expenses, your additional coverage will take effect.

For example, suppose you have a specialist visit that costs $400. Your primary plan covers 70% and will pay $280. Your secondary plan may cover part of or all of the remaining cost, depending on your coverage limits.

If your second plan has any cost-sharing amounts, you may be responsible for paying them, even if you have a primary health insurance plan.

How can you determine which policy is your primary plan and which is your secondary?

You don’t get to choose which plan is your primary coverage and which is your secondary. Your insurance carrier will cover you from your primary health plan whenever you file a claim as if you had no secondary coverage. Then, your secondary health insurance plan will cover any remaining amount.

Health insurers have specific COB rules if you have two health plans. While some of these rules will vary depending on your specific situation and insurance company, some commonalities exist.

The following chart gives you basic guidelines for determining which plan is your primary and which will provide secondary coverage:

Pros and cons of having multiple health insurance policies

It’s vital to consider the advantages and potential downsides of having more than one health insurance plan before you make any changes.

Here are some pros of having two health insurance plans:

1. More comprehensive coverage. Having multiple medical policies offers more benefits and coverage. This can help with medical bills since two plans can cover healthcare costs.
2. Greater protection from loss of coverage. If you have coverage through your parents’ plan or your spouse’s plan—in addition to a company plan—you don’t have to worry about losing health insurance if you lose your job.

Here are some cons of having two health plans:

1. More out-of-pocket costs. Combined health insurance coverage can’t exceed 100% of health costs. You’ll still be responsible for both plans’ monthly premiums and applicable cost-sharing under plan rules. These extra out-of-pocket costs can add up over time.
2. Complex claim processing. Having two separate plans can make processing health insurance claims more challenging. This is especially true if you need to file an out-of-network claim with both of your insurance companies.
   1. Your secondary insurer may also require proof of what the primary insurer paid before covering any costs. If this is the case, you’ll need to wait for an explanation of benefits (EOB) from your primary plan.

If the greater cost-sharing fees are worth the extra coverage based on your healthcare needs, then dual insurance coverage may be the right choice for you and your family.

Do you have to pay out-of-pocket costs if you have two health insurance plans?

Your primary and secondary insurance will cover expenses only up to their individual plan limits. After the secondary insurance pays out, you may still have an amount left over. Therefore, you may still have out-of-pocket expenses even with two separate health insurance plans.

Having two insurance plans may mean paying additional premiums and having two separate deductibles. If you’re worried about potential out-of-pocket costs, you have some coverage options.

If your employer offers a health reimbursement arrangement (HRA), you can get your qualifying out-of-pocket medical expenses reimbursed tax-free, up to a set monthly allowance amount. Depending on the type of HRA, qualified costs can include your insurance premiums, deductibles, copays, and coinsurance fees.

Here are the three most popular HRAs employers offer:

1. Individual coverage HRA (ICHRA): This HRA is for employers of all sizes and has no annual contribution limits. Only employees with a qualifying form of individual health coverage can use this health benefit.
2. Qualified small employer HRA (QSEHRA): This HRA is for small employers with fewer than 50 full-time equivalent employees (FTEs). It has annual maximum contribution limits, and employees must have a health plan with minimum essential coverage (MEC) to participate.
3. Group coverage HRA (GCHRA): This HRA is for employers of all sizes with a traditional group health plan. With this HRA, employees can get reimbursements for qualified expenses their group plan doesn’t fully cover. There are no annual contribution limits. But, only employees enrolled in their employer coverage can participate.

With an HRA, you can use your allowance to cover the extra costs you may have to pay out-of-pocket from having two health plans.

Conclusion

Whether you’re a young adult still on a parent’s plan, you qualify for Medicaid, or you and your spouse have two medical insurances, there are many reasons someone might have coverage from multiple health plans.

If you want to secure double coverage, it’s essential to understand how your plans work together to get the most bang for your buck. Coordinating your two health insurance policies may be tricky at first. But by following the guidelines in this article, you’ll be well on your way to managing two plans like a pro.

This article was originally published on December 29, 2021. It was last updated on December 27, 2024.

1. Health Insurance Coverage Projections

2. Medicaid Coordination of Benefits

3. NAIC - Coordination of Benefits Model Regulation