Group Sickness and Accident Insurance

Cobra coverage is extended for

18 months

Cobra applies to

Group health insurance, not group life insurance

Group Contract

In group insurance the policy is called the master policy, and is issued to the policyowner, which could be the employer, an association, a union, or a trust.

Dependent coverage will terminate if

-the dependent fails to meet the definition of a dependent -the overall maximum benefit for major medical benefits is received -the end of the last period for which the employee has made the requied premium for dependent coverage passes

Must exercise cobra within

60 days

Multiple Employer Trust (MET)

A group of small employers who do not qualify for group insurance individually, formed to establish a group health plan or self-funded plan.

Multiple Employer Welfare Association (MEWA)

Any entity of at least two employers, 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.

Small employer

Any person, firm, corporation, partnership, or association that is actively engaged in business and has at least 2 and no more than 50 employees or less.

Small Employer Medical Plans

Every small employer carrier is required to actively offer to small employers at least 2 health benefit plans: 1. Basic health benefit plan 2. Standard health benefit plan

Disqualifying events of Cobra

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

Nebraska Continuation rules

For groups smaller than those eligible for Cobra, group policies are entitled to coverage subject to the following conditions -continuation is not available for any person covered under medicare -the employee must request continuation in writing within 10 days. For dependents continuing coverage, they must request such continuation within 31 days. -Continuation of coverage under the group policy for any covered person must terminate -6 months after the date the employees coverage would have terminated because of termination of employment -12 months after the date the member coverage terminated due to death -If employee fails to make timely payment of premium or -the date on which the group policy coverage would have terminated

Events that terminate coverage

Group coverage may be terminated for an employee if employment is terminated, the employee no longer meets eligibility requirements (becomes part-time) or if the group contract is terminated.

Conversion Notice

Individual must be given notice of the right to convert at least 15 days prior to the expiration date of such period. If they are not given such notice, the period will expire 15 days after such notice is provided. In no event will this period extend more than 60 days.

Individual Employer plans

Normally will provide insurance coverage to all full-time employees. The employer can specify within some limitations how many hours are considered full time, and whether both salaried and hourly employees will be covered. The employer can legally exclude a particular group of employees, like union or part time, from the eligible class of employees

Administrative Capabilities

The per-capita administrative cost in group health insurance is less than the administrative cost found in individual coverage

Persistency

The tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer.

Nebraska Underwriting Requirements

Underwriters are required to take into consideration past and prospective loss experience, including any catastrophic hazards, of the group both within and outside of Nebraska and the effect of these losses on the financial solvency of the company both within and outside of NE

Debtor

a borrower of funds

Cobra

continues the same group coverage the employee had and the employee pays the group premium that the employer paid

Patient Protection and Affordable Care Act

coverage for children of the insured must extend until the adult child reaches the age of 26. The same age limit applies to COBRA for eligible children of the insured. In addition, in the event of loss of dependent child status under the group plan, the dependent child qualifies for a maximum period of continuation coverage for 36 months.

Gender rule

father's plan is always primary when child is covered by both parents

Group underwriting vs individual underwriting

in 50 groups or more, medical info cannot be required of plan participants. In small gropus, even one bad risk can have an impact on the claims experience of the gropu.

Experience rating

premiums are determined by the experience of this particular group as a whole-group insurance

No-Loss No-Gain

requires that when health insurance is replaced, ongoing claims under the former policy must continue to be paid under the new policy, thereby overriding any preexisting conditions exclusion

Creditor group

specialized use of group life and group health insurance that covers debtors (borrowers). It protects the lending institution from losing money as the result of a borrowers death or disability. Generally, the borrower is the premium payor but the lending institution is the bene of the policy. The amount of insurance cannot exceed the amount of indebtedness

Employer-sponsored groups

the employer provides group coverage to its employees. Eligible employees usually must meet certain time of service requirements and work full-time.

HIPAA

the health insurance portability and accountability act is a federal law that protects health information

Certificate of Coverage

the individuals covered under a group insurance plan are issued evidence of coverage in the form of certificates of insurance, or certificates of coverage. The certficiate of insurance cannot contain provisions or statements that are unfair, misleading or deceptive. The certificate tells what is covered in the policy; how to file a claim, how long the coverage will last, and how to conver thte policy to an individual policy

Death, divorce, or legal separation

the period is 36 months for Cobra for dependents

If a married couple both have group coverage in which they are each named as dependents on the others policy

the persons own group coverage will be considered primary. The secondary coverage (spouse's) will pick up where the first policy left off

Divorced or separated

the policy of the parent who has custody of the children will be considered primary

Persistency

underwriter takes persistency into consideration because groups that change insurance companies every year do not represent a good risk

Insurer Underwriting Criteria

-Certificates are guaranteed issue with no individual underwriting -Premiums are determined by age, sex and occupation of the entire group -The reasons for forming the group are other than purchasing insurance -A certain participation level must be maintained -There is a flow of new members through the group -There is an automatic determination of benefits which is not discriminatory (everyone has the same coverage)

Dependent eligiblity

-a spouse -a child younger than the limiting age, which includes natural children of the insured, stepchildren, children legally placed for adoption, and legally adopted children -Disabled children who are incapable of self-support as the result of a physical or mental disability, and are dependent upon the insured support and maintenance.

association group

Can buy group insurance for its members, the 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.

Plan Design Factors

Contributory plan-eligible employees contribute to payment of the premium (both the employee and employer pay part of the premium) at leas t75% of all eligible employees must participate in the plan -Noncontributory- 100% of the eligble employees must be included, and the participants do not pay part of the premium. The employer pays the entire premium.

Eligibility for coverage

Group health plans commonly impose a set of eligibility requirements that must be met before an individual member is eligible to participate in the group plan. It is common that in order to be eligible, the employee must be full time (usually 30 hours per week( and have been employed by the employer from 1-3 months

Regulatory Jurisdiction/Place of Delivery

Group insurance can often provide coverage for employees in more than one state. Which state law has jurisdiction over the policy? the satte in which the coverage was delivered would have jurisdiction. Most state laws says that multi-state policies are acceptable if the policy is approved by the issuing state, written in substantial compliance with the laws of the delivery satte, and if the laws governing group insurance are substantially similar between the issuing state and the delivery satte

Advertising

Health insurance advertising must be truthful and not misleading. Words and phrases may not be used if their meaning is clear only be implication or familiary with insurance terminology.

Birthday rule

If both parents of a child have a family health plan, the insurance plan of the parent whose birthday comes earlier in the year is defined as the primary insurance plan covering the child. The insurance of the other parent becomes secondary insurance.

Coinsurance and Deductible Carryover

In the event that a group health plan changes insurers in mid-year, employees must be fully credited with all expenses that have accumulated toward the annual deductible and/or out-of-pocket limit. This includes copayments for prescription medications in companion or stand-alone prescription drug plans.

Same-sex partners

Most insurers cover domestic or same-sex partners whether or not a state has a domestic partner or civil union law

Coversion Preivelege

Terminated employees are permitted to convert their group coverage to individual insurance without evidence of insurability if the termination was voluntary or involuntary, except for termination due to gross misconduct. Must be initiated during the conversion period which is 31 days of termination of employment. The insurer is allowed to evaluate the individual in order to determine the appropriate premium, either standard or substandard, but may not deny coverage based on this evaluation. The converted policy neither needs to provide the same benefits as the group, nor will it have the same premium. It will be higher

Employee eligibility

Under the Affordable Care Act, employers must extend coverage to all employees who work more than 30 hours per week. In addition, small and large employers may not be denied coverage for failure to satisfy the minimum participation or contribution coverage

Extension of benefits

When a group policy is discontinued, the policy must provide for a reasonable extension of benefits to any covered person who is totally disabled at the time the group policy is terminated

Annual Open Enrollment

a 30-day open-enrollment period is available once a year to employees who reject coverage during the inital enrollment period and later wish to have cover or to add dependent coverage

Creditor

a lendor of funds

Self-funded programs

a noninsured plan that uses a trust fund to pay for employees' health care expenses directly

coordination of benefits provision

a provision often included in health insurance policies to prevent the insured from collecting more than 100 percent of covered charges; it requires that benefit payments be coordinated if the insured is eligible for benefits under more than one policy. Loss-Amount covered by primary plan=amount covered by secondary plan

Extension of benefits

a provision that allows coverage to continue beyond the policy's expiration date for employees who are not actively at work due to disability or who have dependents hospitalized on that date (coverage continues only until the employee returns to work or the dependent leaves the hospital)

Types of Eligible Groups

in order to qualify for group coverage, the group must be formed for a purpose other than obtaining group health insurance. In other words, coverage must be incidental to the group. Two types of groups eligible for insurance; employer-sponsored and association-sponsored

Community rating

individual policies,, here the premium is based upon overall claims experience for the insurance company.

Standard benefit plan

managed care plan developed in conjunction with the Health Benefit plan committee that provides better benefits at a higher cost

Basic care

managed plan developed in conjunciton with the Health Benefit plan committee. Lower in cost than the standard benefit plan.

Renewability of coverage for small employer

must be renewable with respect to all eligible employees and dependents, at the option of the small employer except -Nonpayment of premiums -Fraud or misrepresentation -Noncompliance with the carrier's minimum participation or employer contribution requirements -Repeated misuse of a provider network provision -The small employer carrier elects to nonrenew all of its health benefit plans delivered or issued for delivery to small employers or -The department of insurance finds that the continuation of the coverage would not be in the best interests of the policyolders, or may impair the carrier's ability to meet its contractual obligations

Consolidated Omnibus Budget Reconciliation Act (COBRA)

requires any employer with 20 or more employees to extend group health coverage to terminated employees and their families after a qualifying event including -Voluntary termination of employment -Termination of employment for reasons other than gross misconduct -Employment status change; from full time to part time

Underwriting

risk selection and classification process

Characteristics of Group insurance

the contract between the insurance company and the group sponsor (employer, union, trust or other sponsoring organization

Employer Group Health Insurance

the cost of group health insurance is lower than the cost for individual insurance since the administrative costs and selling expenses found in group health insurance are far less

Premium of cobra

the employer may collect a premium from the terminated employee at a rate of no more than 102% of the individual's group premium rate. The 2 % charge is to cover the employer's administrative cost

10 day period examination

when a contract is converted, the insured has 10 days to examine the new contract. If the contract is returned, all premiums will be refunded.