The birthday rule is a health insurance coordination policy used to determine which parent’s plan will be the primary payer when a newborn or child is covered under both parents’ health insurance. Despite how it sounds, the birthday rule doesn’t prioritize age—it goes by calendar date.
In Simple Terms:
- The parent whose birthday (month and day) comes first in the calendar year holds the primary insurance for the child.
- If both parents share the same birthday, the parent with longer continuous coverage usually provides the primary policy.
This rule is widely followed by private insurance plans, and especially under commercial health insurance coordination of benefits (COB) protocols.
Note: The birthday rule is not part of federal law but rather an industry-standard practice endorsed by the National Association of Insurance Commissioners (NAIC) and followed by most insurers, including those aligned with CMS (Centers for Medicare & Medicaid Services) protocols.
CMS Guidelines & Coordination of Benefits
According to the CMS Coordination of Benefits User Guide (Chapter 5 & 7, latest revision), Medicaid and Medicare plans do not use the birthday rule. Instead, the “payer of last resort” principle applies, where Medicaid pays only after all other insurances are exhausted.
However, when a newborn is dually covered by two commercial employer-sponsored plans, the birthday rule is applicable for determining primary vs. secondary coverage, and CMS recommends adhering to NAIC rules for COB in private payer scenarios.
Relevant CMS Reference:
CMS COB Manual, Chapter 5: “In cases where the beneficiary is covered under more than one group health plan, the NAIC model is used to determine the order of benefit determination.”
Real-World Scenario: How It Works
Example:
Let’s say:
- Mom’s birthday is April 10
- Dad’s birthday is August 22
- Both have employer-sponsored health plans
Even if Dad’s plan is more comprehensive, the child’s primary coverage will be through Mom’s plan, because April comes before August.
Why It Matters for Medical Billers
For medical billing professionals, understanding the birthday rule is essential to avoid claim denials, appeals, and payer confusion. Misidentifying the primary insurance often leads to:
- Rejected claims due to incorrect primary payer
- Double work (rebilling, coordination)
- Delayed provider reimbursements
- Incorrect patient responsibility assignments
Pro Tip for Billers: Always verify coordination of benefits during patient registration, especially for dependents and newborns.
Coverage for Newborns: What’s the Window?
Under HIPAA regulations, a newborn is automatically covered for the first 30 days under a parent’s existing plan. However, post-30-day coverage requires formal enrollment.
Best Practices for Parents:
- Add your baby to your employer-sponsored plan within 30 days of birth.
- Consider adding to both plans (if possible) for better COB protection.
- Clarify the birthday rule with both insurance companies.
Birthday Rule vs. Other Coverage Rules
| Rule Type | Applies To | Key Difference |
|---|---|---|
| Birthday Rule | Commercial dual coverage | Uses calendar date of birth (month/day only) |
| Court Order Rule | Divorced/separated parents | Court-ordered insurance takes precedence |
| Custodial Parent Rule | Non-court ordered dual plans | Custodial parent’s plan is primary |
| CMS Medicaid Rule | Government plans | Medicaid is always payer of last resort |
Top Tips to Navigate the Birthday Rule
- Confirm with Both Insurers – Always verify who’s considered the primary.
- Notify HR/Benefits Dept. – Ensure both plans have your baby on file.
- Update COB Information Annually – Plans may reset COB logic during open enrollment.
- Educate Parents During Intake – A quick explainer can save hours of back-end denial work.
- Appeal Strategically – If a claim is denied based on wrong payer order, refer to NAIC & CMS COB guidelines when appealing.
Exceptions to the Birthday Rule
There are specific situations where the birthday rule does not apply:
- Divorced/Separated Parents: The custodial parent’s plan is primary, unless a court order states otherwise.
- One Parent Has COBRA or Marketplace Plan: Typically, the active employer plan takes priority.
- Medicaid or CHIP: These are secondary by federal mandate unless there is no other insurance.
Out-of-Pocket Costs & the Birthday Rule
Parents may assume having dual coverage means less cost—but that depends on how well the plans coordinate.
If You Get It Right:
- Primary covers a large portion of care.
- Secondary may pick up the rest, minimizing patient bills.
If You Get It Wrong:
- Incorrect coordination can lead to denied claims.
- You may face high out-of-pocket costs until corrected.
Can You Appeal a Birthday Rule Decision?
Yes—especially if:
- You believe the wrong plan was marked as primary.
- The plan did not follow proper COB logic.
- The child’s coverage was denied due to missing enrollment.
Supporting documentation (birth certificates, plan summaries, HR letters) may be required.
Alternatives to the Birthday Rule?
The only real “alternative” is for employers to structure plans differently or for parents to use a single plan. In rare cases, employers may override birthday rules with custom coordination clauses, but this must be confirmed in the Summary Plan Description (SPD).
Summary & Key Takeaways
- The birthday rule is used by most private insurance plans to decide which parent’s plan pays first for a child.
- It’s based on the parent’s birthday (month/day) and not age or plan type.
- CMS guidelines defer to NAIC model rules for private plans but prioritize Medicaid/Medicare differently.
- Understanding this rule can prevent billing errors, delays, and claim denials.
- Always confirm COB during intake and educate families to ensure newborn coverage is secure.
Internal Linking Opportunities
Here are blog posts you could link internally to:
- “Newborn Insurance Enrollment Checklist: What Parents Need to Know”
- “How Coordination of Benefits Works: A Medical Biller’s Guide”
- “Understanding Out-of-Pocket Maximums in Family Health Plans”
- “Medicaid vs. Private Insurance: Coverage Rules Explained”