Chapter 13 - Group Health Insurance
Age Discrimination in Employment Act (ADEA)
Age discrimination involves treating someone (an applicant or employee) less favorably because of his age. The ADEA: • Applies to groups with 20 or more employee • Forbids age discrimination against people who are age 40 or older • Provides that employers cannot deny older workers coverage under a group health plan
COBRA Dependents
Coverage may continue for dependents up to 36 months for certain qualifying events: • Death of employee • Divorce or legal separation • Employee's entitlement to Medicare benefits • Loss of dependent status
COBRA Individuals recieving S.S.D.
Coverage may continue up to 29 months if an individual qualifies for Social Security disability
Community rating
Determines premiums by examining a particular geographic region of all insureds in a group.
COBRA Continue Coverage
Employees must be notified of their right to continue coverage. The employee or the beneficiary must notify the employer within 60 days if they elect to continue coverage.
Characteristics of Group Insurance
Employers are the most common sponsors of group insurance. These plans usually cover only nonoccupational (not work-related) injury or disease. In order for a group to be eligible, it must be considered a natural group, which is a group that is formed for a purpose other than to obtain group insurance.
Events that terminate coverage
Group coverage may be terminated for an employee if employment is terminated
Individual Plans and Eligibility under HIPPA
HIPAA guarantees that individuals who meet the eligibility requirements will have access to and will be able to renew an individual health plan
Guaranteed Coverage under HIPPA
HIPAA now allows a new employee to enroll immediately without a waiting period if a certificate of creditable coverage is presented. This law also applies to employees leaving the employer to become self-employed. They cannot be denied coverage.
Risk pools
High-risk pools are private, self-funded health insurance plans organized by a state to serve high-risk individuals who meet enrollment criteria and do not have access to group insurance
Reinstatement for Military Personnel
If an employer discontinued health coverage during deployment, federal law requires an individual be allowed to resume plan membership without any type of waiting period as long as notice is given to the insurance company directly after your military deployment.
Relationship with Medicare
If an individual is age 65 or over and continues to work, Medicare is usually the secondary insurer to any employer group health plan the individual participates in.
Experience Rating
Insurers may use experience or community rating when determining cost. Experience rating is determined by examining the history of claims a particular group experiences. The insurer uses past experience to predict future cost.
Associations
Must have at the outset a minimum number of members (usually 100) and is organized for a purpose other than buying insurance.
Civil Rights Act/ Pregnancy Discrimination Act (PDA)
Pregnancy discrimination involves treating a woman less favorably on the basis of pregnancy, childbirth, or related medical conditions. The PDA: • Applies to groups with 15 or more employees • An employer cannot discriminate in its employment practices against a woman because of any pregnancy-related conditions
Labor Unions
The Taft-Hartley Act was a 1947 amendment to the National Labor Relations Act of 1937. Among the provisions of the Act, labor unions were permitted, under certain conditions, to establish primarily employer-funded trusts for the provision of health and welfare benefits to union members.
Worksite Plans
These plans are voluntary benefit plans offered by insurance companies and premiums are withheld as payroll deductions by the employer. These plans allow employees to pick and choose among various types of insurance coverages to supplement other employer-sponsored benefits.
Continuation of coverage under COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985)
This Act states employers with 20 or more employees must provide a health coverage continuation option to all covered employees and dependents up to 18 months
Persistency
This refers to the renewal quality of a plan and preventing it from lapsing due to nonpayment or being replaced.
Termination under COBRA
Timely premium payments are not made • Employer ceases to maintain any group health plan • Employee becomes eligible for Medicare benefits; dependents remain under COBRA • Employee becomes eligible for any other group health plan • Employee converts to an individual health plan
Eligibility for coverage
To be eligible, an employee must be considered full time and work a minimum of 30 hours as established by the Affordable Care Act.
Extension of Benefits
When a group health insurance policy is terminated or replaced, covered individuals who are being treated for a medical condition must continue to have their claims covered.
Regulatory Jurisdiction/Place of Delivery
When a group insurance contract insures persons living in more than one state there must be an understanding as to which state has regulatory jurisdiction over the contract.
Conversion Privilege
allows an employee to convert the group coverage to an individual policy, without proof of insurability, upon termination of eligibility or termination of the group plan, providing the request is submitted to insurer within 31 days after the qualifying event.
Multiple Employer Trusts (METs)
are entities formed by unrelated businesses in the same or related industrial classification and/or third-party administrators who are called sponsors, thus allowing small to medium sized employers with limited numbers of employees to combine their employees into a single, larger group in order to obtain more favorable life and health insurance premiums and increased benefits (METs can also provide access to other employee benefit plans, such as defined contribution or defined benefit retirement plans).
Multi-Employer Welfare Associations (MEWAs)
are generally formed by larger employers for the purpose of obtaining more favorable rates for life and health insurance. These groups primarily consist of employers who self-fund their employees' health insurance benefits.
Group Insurance Contract
between the group sponsor and the insurance company. The group sponsor receives a Master Policy, while individual employees receive a Certificate of Insurance showing a summary of benefits.
Blanket Insurance
covers a group of individuals such as employees, teachers, students, passengers traveling on a common carrier, sports teams, volunteer firefighters, or other groups of people while being exposed to a specific risk.
HIPAA (Health Insurance Portability and Accountability Act of 1996)
designed to provide coverage for people with preexisting conditions
Customer Groups
groups include depositor groups, creditor and debtor groups.
Pre-existing Conditions under HIPPA
is a condition which the insured received medical advice, diagnosis, care, or treatment within the past 6 months. HIPAA limits the preexisting condition exclusion period for most people to 12 months (18 months if a late enrollee).
Contributory plans
require that both the employees and employer contribute to the premium, and 75% participation is required;
Noncontributory plans
require the employer to pay all premiums and 100% participation is required.
No Loss-No Gain for existing claims and pre-existing conditions
requires that when group health insurance is being replaced, ongoing claims under the former policy must continue to be paid under the new policy, overriding any preexisting conditions exclusion and establishing mandatory risk transfer
Administrative Capability
the cost of administration in a group plan is less than that of an individual plan.
Open Enrollment Period
the employee has 30 days to enroll during an enrollment period
Recipients of COBRA
will be required to pay premiums to the employer. Employers may require a former employee or their surviving spouse to pay up to 102% of the premium.
