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What is a COB transaction?

Updated: 9/11/2023
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16y ago

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A transaction which is posted at the Close Of Business for that day. "CoB" might be used on an informal basis to mean Close of Business but, in health and dental insurance, COB refers to Coordination of Benefits. Coordination of Benefits occurs when a person has coverage through two or more policies. This happens most often when two spouses have coverage provided by their employers. COB is regulated by state insurance law when the policy is through a licensed insurer. This is important because large employers often have plans that are provided under the terms of a federal law, ERISA, which allows them to set their own terms. These employer-sponsored ERISA plans, don't follow COB. Under COB laws the state determines which insurer pays 1st, and which pays 2nd. The insurance policy and contracts with the doctor/dentist determine what is paid. The law provides that the patient or his/her doctor/dentist will be paid up to the total charge--not more than 100%.

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16y ago
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