What function does Coordination of Benefits perform for policyholders with multiple insurance plans?

Coordination of Benefits is essential for policyholders who have multiple insurance plans as it establishes the order in which the different policies will contribute to a claim. When an individual is covered by more than one insurance policy, there needs to be a clear method of determining which insurer is responsible for what portion of the medical expenses.

This process is crucial for ensuring fairness and efficiency in the payment of claims. By determining the claim payment order, Coordination of Benefits helps prevent overpayment by ensuring that insurance payouts do not exceed the total cost of the medical services received. This mechanism is important not only for the policyholders but also for the insurers, as it clarifies their financial responsibilities in covering the insured's medical bills. Thus, the option that states it determines the claim payment order among the plans captures the fundamental purpose of Coordination of Benefits accurately.