Coordination-of-Benefits Clause Law and Legal Definition

Coordination-of-benefits clause is a provision in the insurance contract which provides that the total sum paid for medical and hospital care will not exceed the benefits receivable from all combined sources of insurance. Therefore when a patient is covered under more than one group plan, benefits paid by all plans will be limited to 100% of the actual charges after each deductible has been satisfied.

Group health care insurance plans have increasingly included coordination of benefits clauses because the enlarged number of two-employee families has increased the possibility that a claimant could be covered under more than one plan. By conditioning coverage on specified circumstances, the clauses seek to limit their costs and prevent a claimant from acquiring coverage from multiple plans in excess of the claimant's covered medical expenses. [McGurl v. Trucking Emples. Welfare Fund, 124 F.3d 471, 474 (3d Cir. N.J. 1997)]

Coordination-of-benefits clause is also known as COB clause.