Chapter 6: Group Health Insurance

Marketing Considerations - Advertising

Disability insurance advertising must contain full and fair disclosure. It also must be truthful and not misleading.

Employer Group Health Insurance

More than 80% of health insurance issue today is in the form of group insurance. Group health insurance is provided at a lower cost than individual coverage, as a result of lower administrative and selling expenses.

Defined Groups

A group must be formed for a purpose other than obtaining group insurance to be qualified for group coverage. The two types of groups that qualify for group health insurance our employer sponsored and associations a natural group is a defined group.

Multiple Employer Welfare Arrangements

Are groups of employers that pool there risks in order to self-insure. The minimum number of employees to establish a MEWA is 100.

Employer Group Health Insurance - Special Enrollment Periods

The periods of time the new employees can roll without evidence of insurability. Usually the employer requires her employees to work for 30 to 90 days.

Employer Group Health Insurance - Eligibility For Insurance - Employee Eligibility

- Eligibility is established by employers classification as a full-time employee minimum 30 hours per work week. - A probationary period may also be applied for 30 to 90 days. It is a period of time that a person joining group coverage must wait before being eligible for benefits.

Employer Group Health Insurance - Eligibility For Insurance - Dependent Eligibility

- A spouse - Children under the age of 26. (The child can be married but the wife and kids will not be covered) - Parent if there is proof of their dependency. -Children who are in capable of supporting themselves as a result of a disability or being mentally or physically challenged. Dependent children may be eligible dependent beyond age 26 if they are permanently mentally or physically disabled before that age. Proof of dependency is required within 31 days

Employer Group Health Insurance - Change of Insurance Companies or Loss of Coverage - CoInsurance and Deductible Carryover

Call insurance and the basketballs are carried forward from an old plan to a new plan. This carryover is to credit expenses, and not cause an insured any additional expenses.

Employer Group Health Insurance - Change of Insurance Companies or Loss of Coverage - Continuation of Coverage Under COBRA

The consolidated Omnibus Budget Reconciliation Act COBRA is a federally mandated program that states the following: Employers with 20 or more employees are required to provide for the continuation of benefits under their group health plan for former employees and their dependence, for up to a period of 18 to 36 months, after a qualifying event.

Defined Groups - Employer

To be eligible, and employee must normally be a full-time employee (30 hours per week is considered full-time). If the group plan is Contributory 75% of the employees are required to participate in the plan and share the premium with their employer. A small employer health benefit plan is contributory, and the claims experience of the group is an underwriter's consideration. If the plan is a non-contributory plan, then there must be 100% participation of the eligible employees. An employer pays the premium for a non-contributory plan. The group plans require a certain percentage of participation to guard against adverse selection and to reduce costs.

Characteristics of Group Insurance

Employers make health insurance available to their employees by paying the premiums, or sharing the premium payments with their employees. The contract is between unsure and employer or another master policy holder. It is the insurer's Spons ability to make sure an applicant does not already have another accident or sickness policy in force.

Employer Group Health Insurance - Insurer Underwriting Criteria - Characteristics

- Certificates are issued on a guaranteed basis, without individual underwriting taken into consideration. - Are determined on a group basis based on age sex and occupation. - Seeking coverage must not have been formed strictly to obtain coverage. - The plan is contributory 75% of the employees must participate and share the cost with their employer. If the plan is noncontributory 100% of the employees must participate and the employer pays the premium. - There must be a reason really steady flow of new members joining the group. - Every member must be offered the same benefits no discrimination for any reason. - As of 2014 a small group health insurance can be rated on the basis of tobacco use. - A newly acquired dependent by marriage, birth or adoption will permit an uninsured employee to qualify for special enrollment in a small employer health benefit plan. - With a small group health plan, and ensure is required to provide a newly married employee 60 days to add the new spouse to the plan. - If an employee caught a disease from the car specific to their trade in which that employee was exposed, it will be treated as an occupational disease.

Employer Group Health Insurance - Change of Insurance Companies or Loss of Coverage - Events That Terminate Coverage

- Termination of employment - An employee was not eligible because of hours worked (full time/half time) - The Master Contract was cancelled or terminated. - The benefit period for the required premium payment expired. For dependents: - dependent was no longer considered a dependent under the definition of master policy. - Maximum major medical benefits were received. - . For the required premium payment expired.

Labor Union Requirements

- The members eligible for insurance under the policy shall be all the members of the union. -The premiums shall be paid from the funds of the union or from funds contributed by the members of their insurance. - Coverage may be excluded or limited on any person with evidence of individual insurability. -Must have at least 25 members.

Employer Group Health Insurance - Change of Insurance Companies or Loss of Coverage

Employees that are actively working on the date of the transfer to their coverage to another company, are covered automatically by their new group plan, and are exempt from a probationary period. Employees who are not actively working on the date of their transfer must be included in the new plan; however, their benefits are limited to the level of the coverage in their prior plan, until they return to work full time.

Certificate of Coverage

In group coverage, and employee that is covered under the master policy is issued a certificate of insurance. The certificate includes the perils claims process and the benefits.

Community Rating (For Individual Health Plans)

Individual health insurance is rated under the community rating system. The premium charge to all clients is dependent upon the medical and hospital costs in the community or area to be covered.

Individual Employer Plan - Selfunded Plan

Is provided by a single employer who normally covers 100% of his full-time employees. When an employer chooses to pay benefits from a fund, into which an employer makes payments from their current revenues, this is called a self-funded plan.

Employer Group Health Insurance - Insurer Underwriting Criteria

The group's risk determines if the group will be excepted or rejected. The group underwriter tries to avoid adverse selection.

Group Contract

The master policy is issued to the employer in group insurance. The sponsor controls the policy and is responsible for paying the premium. A single contract for group medical insurance issued by an employer is known as a master policy.

Marketing Considerations - Regulatory Jurisdiction - Place of Delivery

There are times when group insurance is provided to employees in more than one state. The state where the courage was delivered would have the jurisdiction. Policies must always comply with the laws of the state they are sold in.

Employer Group Health Insurance - Minimizing Adverse Selection

Underwriters minimize adverse selection in several ways: - having mandated waiting periods before the effective date of coverage - excluding pre-existing conditions under the allowable limits of HIPAA - Reducing the choices offered to the subscriber

Employer Group Health Insurance - Change of Insurance Companies or Loss of Coverage - No Loss-No-Gain

Based on the theory that places an insured in the same economic condition after a loss as an insured was in before a loss.

Employer Group Health Insurance - Change of Insurance Companies or Loss of Coverage - Extension of Benefits

Benefits are provided up to a 12 month period or until an individual is not totally or continuously disabled.

Employer Group Health Insurance - Eligibility For Insurance - Annual Open Enrrolment

Who is that another role in group health coverage when they were initially eligible, can enroll without evidence of insurability during an annual 30 day open enrollment period.

Employer Group Health Insurance - Coordination of Benefits Provision

Are used to determine what is paid by primary and secondary companies in case of a claim. The COB provisions Limits the total amount of claims paid from all insurance covering a patient. If all policies contain the COV provision the method an order of payment is as follows: married couple - an individual's group coverage will be the primary. The spouse's coverage (secondary) will provide coverage when their primary expired. children stated as dependents under their parent's group plan use the birthday rule to determine their order of payments. The parent whose birthday is earliest in the year. If the gender rule is applied, it considers the father's coverage primary. If divorced or separated, the parent who has custody is considered the primary coverage.

Multiple-Employer Trust

Are legal arrangements for employers that are too small to be qualified for group insurance, so at least two or more employers obtain group coverage by joining together. It is a method of marketing group benefits to employers that have small number of employees.

Employer Group Health Insurance - Change of Insurance Companies or Loss of Coverage - Reinstatement of Coverage for Military Personnel

Returning Military personnel must be given the same benefits as all other full-time employees.

Employer Group Health Insurance - Continuation of Coverage

Several state and federal statutes have been an enacted in recent years to protect insureds When their insurance has been terminated. Also, new employers must provide full healthcare benefits available immediately to new hire employees who were previously covered under another group.

Employer Group Health Insurance - Insurer Underwriting Criteria - Plan Design Factor

Unlike individual underwriting if a group is comprised of 50 or more members, medical information cannot be required from the members.

Employer Group Health Insurance - Change of Insurance Companies or Loss of Coverage - Notification of Medicare Eligibility

Employees must notify employer and their insurer when they are eligible for Medicare.

Employer Group Health Insurance - Eligibility For Insurance

Generally, employees must be full time, work in a covered class and be active at work.

Experience Rating

Group health plans are subjected to experience ratings and the premiums are determined by the past lost experiences of the particular group as a whole. The groups premium will be lowered if they have a low claims experience.

Association

Is a group that has at least 100 members, has been active for at least two years, has a constitution, bylaws, hold annual meetings, and has been formed for a purpose other than buying insurance for its members. And association can be a contributory or non-contributory plan.

Employer Group Health Insurance - Change of Insurance Companies or Loss of Coverage - Conversion Privilege

Terminated employees are given the right to convert their group insurance without evidence of insurability to an individual policy. The converted policy will have lesser benefits and a higher premium than their group policy. Individual policy is not required by law to provide the same benefits at the same cost as their are group policy. Ameri dependent is not eligible for a conversion privilege if the policyholder was fired from a company with less than 20 employees. Conversion is always to the benefit of the company. The conversion. Is 31 days from an employees termination to their employment.