Chapter 18 group health insurance

Regulatory jurisdiction

A group health insurance policy is regulated by the state in which it is delivered, assuming that state is also where the employer has its principal business office.

Group credit disability insurance.

A lender, or creditor, my sponsor a group plan/disability/insurance plan for its grip doctors. Two features separate group credit insurance from other types of group insurance. Well other types of group insurance may not be made payable to the sponsoring group, group credit insurance can be. And the amount of coverage under a group of credit insurance plan is limited to the amount of the insured debt.

Association group plans

A trade, professional, or other type of association will sponsor a group plan for its members.

Composition of the group

Age, sex, and income of the members of the group will affect the potential benefits that will be paid.

Qualified beneficiary

An individual covered under an employer maintained group health plan on the day before the qualifying event. Usually includes covered employees, spouse of covered employees, and dependent children of covered employees, including children born or adopted during the first 18 months of a benefit continuation period.

Employee Retirement Income Security Act (ERISA)

And I could to protect the interests of participants and employee benefit plans as well as the interest of the participants beneficiaries. Plenty else with qualified pensions and also group insurance. Requires that certain information concerning any employee welfare benefit plan, including group insurance plans, be made available to plant participants, their beneficiaries, the department of labor, and the IRS.

Employee group plans

And employer my sponsor a group insurance plan for its employees.

Coordination of benefits

Comes in when working couples may both have insurance. Secondary plan pays excess while primary plan pays first up to its limit. Applies when a person is covered by two group policies. One plan is primary and pays first. Other plan is secondary and paste only applause is greater than primary coverage. Employee plan is primary Children - primary plan is parent whose birthday comes first in the calendar year, not the oldest. Custody may determine primary.

Dependent eligibility

Coverage must also be made available to a participating employee spouse or children up to age 16. This includes step children and adopted children. Applies whether or not the child is married or a student. Coverage may also be made available to a participating employees dependent parents. Many states require the children other than age 16 because of her buy a plan if they are mentally or physically disabled and unable to support themselves.

Contributary or non-contributory

Employees pay part of the cost in contributory plans, and at least 75% of those eligible must participate in the plan. When the employer pays the entire cost in a non-contributory plan, and 100% of eligible employees must participate.

Events that terminate coverage

Employer terminates the plan Employer didn't pay the premium Employee quits, is laid off, or has a reduction in hours to make them part time instead of full-time. A spouse or child lose the plan due to divorce from the insured employee When the employee dies or is terminated Non-disabled child reaches age 26.

Employee eligibility

Employers cannot discriminate with group benefits. All employees are eligible can enroll a guard list of age, handicaps, or sex. Pregnancy and maternity must be treated like any other covered condition. Employers can establish basic employment criteria such as full-time, and actively at work. Employers may also exclude union workers as a class, since their compensation and benefits are covered by a collective bargaining agreement.

Notification statements

Employers must provide notification statements to individuals eligible for COBR a continuation within 14 days. The company must notify new employees of their rights on the cobra when they are informed of their employee benefits. Notification of an employee spouse or other dependence must be made in writing and sent to the last known address of the spouse or dependent. The option to elect continuation expires 60 days after an individual receives the notification.

Characteristics

Employment-based health insurance programs have characteristics of life, health, disability, and the lakes have similar characteristics such as enrollment eligibility, low-cost coverage, no proof of insurability to enroll, and convertibility options when exiting the plant.

Eligibility for coverage

Everyone eligible cannon roll No discrimination Employer establishes basic criteria. For example full-time employees only.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Federal law that requires employers with 20 or more employees to allow former employees and their dependence to continue the benefits provided by the employers group health insurance plan. Coverage may be continued for 18 to 36 months. Employees or dependents must pay the entire premium for the coverage. COBRA specifies rates, coverage, qualifying events, qualifying beneficiaries, notification procedures, and time of payment requirements for the continued insurance.

Group underwriting criteria

Group insurance underwriters do not evaluate the risk presented by each of the ritual. They look at the wrist presented by the characteristics of the group and the plan as a whole. Premiums are based on the experience of the group and can change at each renewal. Group underwriting means that individuals can enroll in a group insurance plan without providing evidence of insurability. Each individual submits an enrollment card with basic identifying information. Criteria includes: Size of the group. Composition of the group. Flow of members through the group. Plan to sign. Contributory or non-contributory. Persistency. Administrative capability.

Multiple Employer Trust (MET)

Group of small employers in the same industry who either form together in order to purchase group insurance as one entity or self fund a plan.

Health insurance portability and accountability act (HIPAA)

If it's for small employers, self-employed, pregnant woman, and mentally ill. Was replaced by Obama's affordable care act. Affected pre-existing conditions, includes most health coverage, guaranteed 48 hour hospital stay for new mothers after regular delivery and 96 hours for C-section, small employers cannot be denied.

Flow of members through the group

Individuals joining and leaving the group on a regular basis reduces the risk of adverse selection.

Other characteristics of group insurance

Insurers many people in one contract Usually less expensive than individual insurance Sponsor receives the master contract Participants receive a certificate of insurance Premium is based on either: Experience rating - based on claims history of the individual group. Community rating - based on pulling groups/also used in reading individual insurance.

Administrative capability

Large employers can lower group premium cost by helping administer to plan and use the insurer for stop loss coverage and or claims processing.

Size of the group

Larger groups can more likely avoid adverse selection.

Duration of coverage

Maximum period of coverage continuation for termination of employment or a reduction in hours of employment is 18 months. All other qualifying events the maximum. Of coverage continuation is 36 months. These events can be sold in early termination of coverage: The first day of premium is overdue The date the employer ceases to maintain any group health plan The date on which the individual is covered by another group plan The date the individual becomes eligible for Medicare The coverage must be the same the insurer had while employed. The premium must also be the same except that now the person has to pay the entire premium even if before the employer paid part of it. The terminated individual might also have to pay an additional amount each month and exceeding 2% of the premium to cover the employers administrative expenses. These apply only to health benefits under cobra.

Probationary, or waiting period

New employees must wait before they can enroll in an employer group health insurance plan. Typically range from 1 to 6 months.

Omnibus budget reconciliation act of 1989 (OBRA)

OBRA extended the minimum COBRA continuation of coverage. 29 months for qualified beneficiaries disabled at the time of termination. Disability must meet the Social Security definition of disability. The plan can charge qualified beneficiaries and increase premium up to 150% of the group premium during the 11 month disability extension, which would be months 19 to 29.

COBRA Qualifying events

Occurs when an employee, spouse, or dependent child lose coverage under the group insurance contract. Events include: That's of a covered employee Termination of a covered employee, except for Gross misconduct Reduction of hours of a covered employee Medicare eligibility for a covered employee Divorce or legal separation of a covered employee from the covered employee spouse Termination of a child's dependent status Bankruptcy of the employer.

Eligibility period And open enrollment

On probation. And new employees can enroll in the group health insurance plan during the eligibility or enrollment. Which is typically 30 or 31 days. Most states require an open enrollment period every year. Individuals with a claim coverage during the initial eligibility. Can enroll in the health plan during this period without providing evidence of insurability. No medical questions. Late enrollees are individuals who want to enroll for coverage at any time other than the initial eligibility. What an annual open enrollment. And may be required to provide evidence of insurability. This would be a medical questions.

Multiple employment welfare arrangements/MEWAs

Provide health and welfare benefits to two or more unrelated employers. Purpose is to provide affordable health coverage to small employers

Extension of benefits

Requires of benefits paid fine in force policy continue after the policy is terminated. Some states require an extension of benefits to a totally disabled member at the time of policy discontinuance.

Advertising

States regulate marketing and advertising of accident and health insurance policies to make sure they are truthful and give full disclosure of information when selling policies. Must not be misleading or obscure and Clearly outline all policy exclusions or limitations and coverage as well as policy benefits.

Eligible groups Requirement

The general eligibility rule is a group must have been formed for a purpose other than obtaining insurance prince members. This defines a natural group. The insurance plan must be incidental to the group rather than its primary reason for being.

Taft-Hartley trust

Two or more labor unions may join together to provide group insurance for their collective members.

Plan to sign

What will be covered and for how much

Persistency

When employers keep their group coverage with the same ensure year after year, the insurance expenses are reduced.

Coinsurance and deductible carryover

When group insurance is replaced by another plan. Then even sure will allow coinsurance and deductible is paid under old plan to come towards a new plan requirements. This makes the transition easier for covered employees. No loss no gain Requires benefits for ongoing disability claims that started under an old plan to continue without imposing the new plans eligibility requirements.