What is the purpose of the Coordination of Benefits provision in group accident and health plans?

The Coordination of Benefits (COB) provision in group accident and health plans is designed to avoid overpayment of claims when an individual is covered by multiple health insurance policies. When someone has more than one insurance plan, there can be confusion about which plan is responsible for paying a claim first. The COB provision establishes an order of payment to ensure that the total benefits paid do not exceed the actual expenses incurred by the insured.

This prevents the scenario where a claimant might receive more in benefits than what they actually spent on medical services, which could lead to unnecessary costs for insurance companies. The COB helps manage how claims are settled when multiple policies are involved, coordinating between the different insurers to ensure fair and proper payment without leading to overcompensation.

The other options, such as minimizing claim processing time, increasing premiums, or providing unlimited coverage, do not accurately reflect the primary goal of the COB provision. While efficient claim processing is important, that is not the specific function of the COB. Similarly, increasing premiums and providing unlimited coverage are not objectives of the COB mechanism. Instead, the focus is squarely on preventing overpayment, making the correct answer the one that relates to avoiding excessive claims payments.