The fabrication of lightweight, ultra-thin, low power and intelligent body-borne sensors leads to novel advances in wireless body area networks (WBANs). Depending on the placement of the nodes, it is characterized as in/on body WBAN; thus, the channel is largely affected by body posture, clothing, muscle movement, body temperature and climatic conditions. The energy resources are limited and it is not feasible to replace the sensor�s battery frequently. In order to keep the sensor in working condition, the channel resources should be reserved. The lifetime of the sensor is very crucial and it highly depends on transmission among sensor nodes and energy consumption. The reliability and energy efficiency in WBAN applications play a vital role. In this paper, the analytical expressions for energy efficiency (EE) and packet error rate (PER) are formulated for two-way relay cooperative communication. The results depict better reliability and efficiency compared to direct and one-way relay communication. The effective performance range of direct vs. cooperative communication is separated by a threshold distance. Based on EE calculations, an optimal packet size is observed that provides maximum efficiency over a certain link length. A smart and energy efficient system is articulated that utilizes all three communication modes, namely direct, one-way relay and two-way relay, as the direct link performs better for a certain range, but the cooperative communication gives better results for increased distance in terms of EE. The efficacy of the proposed hybrid scheme is also demonstrated over a practical quasi-static channel. Furthermore, link length extension and diversity is achieved by joint network-channel (JNC) coding the cooperative link. © 2018 by the authors. Licensee MDPI, Basel, Switzerland.