How Assignment of Benefits Simplifies Long‑Term Care Insurance
Assignment of Benefits (AOB) is a common tool in long-term care that allows payments for services to go directly to the provider. Knowing how AOB works helps people receiving care, their families, and elder care organizations manage payments more easily.
What is an Assignment of Benefits?
An Assignment of Benefits is a legal document that lets a policyholder or beneficiary give the right to receive insurance payments to someone else, usually a healthcare or long-term care provider. This means the insurer pays the provider directly for covered services, up to the daily benefit amount.
Note: If the policyholder has an elimination period that has not yet been satisfied, they must satisfy it before the insurance reimburses the provider.
How does an Assignment of Benefits work?
When someone starts a long-term care program, such as a nursing home, assisted living, or home health agency, they can choose to sign an AOB agreement. Once it is signed:
- The policyholder assigns their insurance benefit rights to the provider.
- The provider submits claims directly to the insurer.
- The insurer pays benefits directly to the provider, up to the policy’s coverage limits.
- The resident remains responsible for any costs not covered by insurance (e.g., elimination periods, co-payments, or services outside policy scope).
Note: The insured can only assign benefits to one provider. If they are working with more than one, this is important to remember.
Benefits of Assignment of Benefits
Assignment of Benefits makes payments simpler by sending insurance payments straight to providers. This means less paperwork for clients and their families. It also lowers financial stress because families don’t have to pay providers first and then wait for the insurance company to reimburse them.
Best practices for clients and families
- Review the AOB agreement carefully, ideally with legal or financial counsel.
- Confirm policy coverage details, including benefit limits, elimination periods, and covered services.
- Request transparency from providers regarding billing practices and insurance submissions.
- Maintain copies of all documents, including insurance policies, AOB forms, and explanations of benefits (EOBs).
When someone else handles the paperwork, the phone calls, the follow‑ups, and all the tiny details, you get to focus on what actually matters: being present, feeling supported, and knowing your family is in good hands. Have questions or just want to understand your options? Our long-term care insurance team is happy to chat and guide you through the next steps.
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