Group Health and Blanket Insurance

Contributory plan

Eligible employees contribute to payment of the premium (both the employee and employer pay part of the premium) In NY if a plan is contributory, at least 50% of all eligible employees must participate in the plan.

Two types of groups eligible for group insurance:

Employer-sponsored, and association-sponsored

Which of the following is monitored by ERISA?

Stock profit-sharing plans

Adverse selection

The tendency of poorer risks seeking out insurance protection

Creditor group

specialized use of group life and group health insurance that covers debtors (borrowers). Protects the lending institution from losing money as the result of a borrower's death or disability.

Qualifying events:

- Voluntary termination of employment - Termination of employment for reasons other than gross misconduct (company downsizing) - Employment status change: from full time to part time

Determining which coverage is primary, if a person insured under an employer's group health coverage also qualifies for Medicare

1)For individuals age 54 or older and - are currently employed (or insured under a working spouse's group plan) - Working for an employer who has fewer than 20 employees Medicare is primary and group plan is secondary 2)For individuals who are eligible for Medicare due to end-stage renal disease (ESRD): Medicare is secondary for the first 30 months and primary after that 3) Everything else: group plan is primary and medicare is secondary

Noncontributory plan

100% of the eligible employees must be included, and the participants do not pay part of the premium. Employers pay the entire premium.

Pregnancy Discrimination Act

Amendment to the Civil Rights Act of 1964. The act states that pregnancy, childbirth and any related medical conditions must be covered to the same extent as any other medical condition under the policy. Applies to employers with 15 or more employees.

501 (c) (9) Trust

Same as Multiple Employer Trusts (MET)

Employee Retirement Income Security Act of 1974 (ERISA)

federal law that was enacted to ensure that employees receive the pension and other benefits promised by their employers.

Regarding health insurance coverage for small groups, insurers are not permitted to:

limit enrollment to a specific number.

Administrative Services Only Arrangements

An arrangement in which an insurer agrees to provide certain services to a self-insured entity, such as providing printed claim forms, and the processing and auditing of claims Also called third party administrator

Family Medical Leave Act of 1993 (FMLA)

An eligible employee is entitled to a total of 12 workweeks of leave during any 12 month period for one or more of the following reasons: - birth of a child of the employee in order to care for that child - placement of a child with the employee for adoption or foster care - The care for the employee's spouse, a child, or parent who has a serious health condition - Because of a serious health condition that makes the employee unable to perform the duties of his/her position.

Conversion privilege

An insured employee will be entitled (in the event that insurance ends b/c the policy has been terminated or the insured is no longer employed or in the class eligible for coverage) to convert to an individual policy within 60 days without evidence of insurability.

Multiple Employer Welfare Associations (MEWAs)

Can be any entity, other than a duly admitted insurer, that establishes an employee benefit plan for the purpose of offering or providing accident and sickness or death benefits to the employees of at least 2 employers, including self-employed individuals and their dependents. Similar to MET other than that MEWAs are groups of employers that pool their risks in order to self-insure.

Association group

Can buy group insurance for its members. Group must have at least 100 members, be organized for a reason other than buying insurance, have been active for at least two years, have a constitution, by-laws, and must hold at least annual meetings.

Group Insurance

Contract is between insurance company and the group sponsor

Small Employer Medical Plans

Every small employer carrier is required to actively offer to small employers at least 2 health benefit plans. One plan must be a basic health benefit plan and the other must be a standard health benefit plan. Basic care is lower in cost than the standard benefit plan. Standard benefit plan provides better benefits at a higher cost.

What is the benefit of experience rating?

Experience rating helps employers with low claims experience because they get lower premiums

Experience rating

Group health insurance is usually subject to experience rating, where the premiums are determined by the experience of this particular group as a whole

Community rating (pool rating)

Individual policies are subject to community rating or pool rating. Premium is based upon the overall claims experience of the insurance company.

Multiple-Employer Trust (MET)

Made up of two or more employers in similar or related businesses who do not qualify for group insurance on their own.

Continuation of coverage

New york law mandates a 6 month continuation of the current health plan to terminated employees and their dependents. Employee must elect continuation privilege within 30 days and is responsible for the full premium payment for coverage. After 6 month period, a conversion privilege must be offered to the employee. Conversion plan does not have to be as comprehensive as the group plan.

Blanket customer groups (teams, passengers, and others)

Operates on same principles as group health insurance. Only difference is that the insured members are not named. Policy is designed for groups where the membership changes frequently.

What is the purpose of a Medicare Carve-out or Supplements?

They pay deductibles or copayments that are not paid by Medicare

Master policy

What the policy is called in group insurance. Issued to policy owner

Highly compensated employee

any employee who: was 5% owner at any time during the year or preceding year or for the preceding year had compensation in excess of $80,000

Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

any employer with 20 or more employees to extend group health coverage to terminated employees and their families after a qualifying event. Coverage extended up to 18 months for any of these qualifying events Employer is permitted to collect a premium from the terminated employee at a rate of no more than 102% of the individual's group premium rate For events such as death of the employee, divorce or legal separation, the period is 36 months for the dependents.

Small employer

any person, firm, corporation, partnership or association that employes at least 2 nor more than 50 eligible employees on the date of application for coverage or, in subsequent years, on the date of the determination of renewal rates.

Disqualifying events

which the COBRA benefits may be discontinued due to. These include failure to make a premium payment, becoming covered under another group plan, becoming eligible for Medicare, or if the employer terminates all group health plans.