Group Health Insurance

Health Insurance Portability and Accountability Act (HIPAA)

Regulates how entities treat the privacy and security of information about a person's health. Also ensures that those who have lost their jobs or want to change health insurance carriers will continue to qualify for medical insurance when they go to another job (called portability)

Over-65 Coverage

The law requires employers to offer employees age 65 and older the same medical coverage offered to younger employees. Coverage offered to spouses must be the same regardless of age. Employees receiving Medicare benefits can reject the employer's plan coverage, making Medicare their primary insurer. The employer cannot offer these employees or spouses a Medicare supplement plan that pays for services covered by Medicare (because doing so would duplicate benefits).

Subrogation

The substitution of a third person in place of a creditor to whose rights the third person succeeds in relation to the debt.

Termination of Plan

An insurer that terminates a plan must usually notify the employer of its intent to discontinue the plan at least 90 days in advance. The insurer must also offer to the employer the option to buy other group health coverage it offers at the time of termination. Any deductible or coinsurance payments a covered employee made under the previous plan are credited to the new plan.

Domestic Partners and Civil Unions

Federal benefits, such as emergency leave and survivor benefits, are available to domestic partners in civil unions. The U.S. Supreme Court has ruled that states must recognize such unions if they are legal under the laws of any state.

Employment Retirement Income Security Act (ERISA)

Federal legislation regulating private pension plans that supplement Social Security. ERISA regulates group health plans with respect to: Information disclosure—Enrollees must receive written information about the plan in a summary plan description. Accountability—A fiduciary must be designated for the plan. The fiduciary administers the plan in a financially responsible manner for the best interests of enrollees. Claims procedures and appeals—Written rules specify how claims must be filed and how participants appeal denials of coverage. Appeals processes must be fair and timely.

Family and Medical Leave Act (FMLA)

Gives certain employees up to 12 weeks of unpaid leave each year while protecting their employed status. Employees can take leave for family or medical reasons without losing their right to group health coverage and benefits. Employers with 50 or more employees are subject to FMLA. They must allow eligible employees up to 12 weeks of unpaid leave each year for: birth of the employee's child placement of a child with the employee for adoption or foster care care of the employee's parent, spouse, or child with a serious health condition employee's serious health condition that keeps the employee from working sudden qualifying necessity arising from a family member being on active military duty, or being called to active duty, in the National Guard or Reserves Employees who have family members in military service are also entitled to 26 weeks of leave within a 12-month period to care for a service member who is seriously ill or injured from active military duty

Guaranteed Issue

HIPAA guarantees that insurers that sell individual health insurance plans must offer them to eligible people who have lost group coverage, regardless of their health

Change of Insurers

If an employer changes plans, most plans will carry over to the following year a portion of coinsurance and deductible requirements that an insured employee satisfied in the final few months of the current year (the carryover period).

Group Health Insurance

Insurance a business or association (the plan sponsor) offers to its employees or members (the plan participants). The sponsor is the policyowner and primary premium payor. The members are the insureds and may contribute to the premium. (For simplicity, the term employer in this lesson refers to the group sponsor.)

Eligible Employees

Most states define an eligible employee as one who works for an employer at least 25 hours each week. Employees who are covered by a union's health plan do not need to be covered by the employer's health plan for non-union employees.

Group Insurance Participation Requirements

Noncontributory plans (in which the plan sponsor pays the entire premium) must cover 100 percent of those eligible to participate. Contributory plans (in which the plan sponsor and the members contribute to the premium) require at least 75 percent of eligible members to participate.

Group vs. Individual Contract

People insured under a group health plan pay less than those who have identical coverage under an individual policy. This is because it costs the insurer less to insure a group since the risk is spread over many people Group insurance also costs less than individual coverage because the employer pays some of the premium. Qualifying for group coverage is easier than qualifying for individual coverage. Group insurance applicants do not undergo the same level of underwriting as individual applicants. Group coverage is more likely to end than individual insurance. Coverage can end if the individual leaves the group. In contrast, individual coverage does not depend on group membership.

Three rules that insurers had to follow when excluding pre-existing conditions from coverage:

Pre-existing conditions could not be excluded from coverage longer than 12 months (18 months for late enrollees and 18 months with self-insured plans). Under a group insurance plan, pregnancy could not be treated as a pre-existing condition. The exclusion period for pre-existing conditions had to be reduced for any time that prior "creditable coverage" satisfied the exclusion period. (Creditable coverage means coverage under a prior medical insurance plan, with no break in coverage lasting more than 63 days.)

Age Discrimination in Employment Act (ADEA)

Prohibits employers from discriminating against those who are at least 40 years old. Regarding group health insurance, the ADEA requires that: Older workers cannot be denied coverage. An employer can either provide equal benefits to all workers regardless of age (and require older employees to contribute more than younger ones) or reduce the benefits provided to older workers (and keep contribution levels equal for all employees).

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Protects those who are no longer covered by an employer's health insurance plan or its benefits. Under COBRA, participants in group plans who voluntarily leave their jobs or are terminated for reasons other than gross misconduct can continue group insurance coverage for up to 18 months. However, they will pay the full premium COBRA coverage ends if the participant is eligible for another group plan or fails to pay the premiums.

Mental Health Parity and Addiction Equality Act (MHPAEA)

Requires group health insurers to ensure that copayments, deductibles, and limitations on treatment for mental health or substance abuse disorders are not more restrictive than they are for other medical or surgical benefits. The Act applies to employers with more than 50 employees.

Small Business Options Program

SHOP

Marketing Requirements for Small Employer Group Health Plans

Small employers are usually defined as having 2 to 50 employees. However, some states define a small employer as one having as few as one employee. In general, states require the following under HIPAA: Health insurers in the small employer market (as defined by the state) must accept every employer applicant that qualifies for small employer coverage. This is guaranteed issue. Insurance coverage must be guaranteed renewable. The insurer must renew it though it may raise the premium. Renewal is not required if the employer did not pay the premium or moved outside the insurer's service area. When offering coverage to a small employer, a health insurer must disclose: -the issuer's right to change premium rates and the factors that may bring about a change - provisions for renewability -benefits and premiums available under all health insurance coverage for which the employer qualifies

Premium Tax Credit for Small Employers

The ACA created the health insurance exchanges: single access portals in every state through which individuals, families, and small businesses and their employees (through the Small Business Health Options Program, or SHOP) can shop for federally-compliant health plans Employers with 25 or fewer full-time employees may be eligible for a federal premium tax credit if they buy health insurance through the SHOP.

Self Insured Plans

The employer pays member claims and benefits. The employer can offer benefits that are best suited to employees' needs. This gives the employer more control over costs and flexibility over benefits. Self-insured plans are common to multiple employer trusts (METs) or multiple employer welfare arrangements (MEWAs). They are also common among small insured groups that have relatively healthy members and few claims. Self-insured plans often have an insurance company administer them. The insurance company is not responsible for claims payments. It renders this service under an Administrative Services Only (ASO) contract.

HIPAA Requirements

The last health care coverage must have been under an employer-sponsored group health plan for at least 18 months (creditable coverage). Insurers provide certificates of creditable coverage to people whose group plan benefits are terminated. The certificates indicate how long they were covered under the group plan (and under COBRA). The person must have exhausted all available COBRA coverage. Those who are terminated from a group plan and decline COBRA coverage are not eligible for a guaranteed issue policy. The person is not covered by Medicare or another plan.

No Loss/No Gain (No Loss of Coverage)

This principle means that employees will neither gain nor lose rights to coverage when an employer changes group health insurance plans or insurers.

Minimum Size

Three entities mandate the minimum size of groups: the Internal Revenue Service (IRS) the state in which the group resides the insurer underwriting the plan Most states and many insurers require that a group have at least ten members to qualify for standard group coverage. Many states require certain groups, such as creditor groups, to have more.

Natural Group

a collection of individuals who work in the same place or belong to the same organization Natural groups eligible for group insurance are: employers labor unions trade associations unions professional and alumni associations creditor and debtor groups blanket customer groups multiple employer trusts (METs) welfare arrangements (MEWAs) franchise associations

Common group health insurance plans include:

medical expense plans long-term and short-term disability plans accidental death and dismemberment plans long-term care plans dental insurance plans vision insurance plans

Pregnancy Discrimination Act

prohibits discrimination based on pregnancy, childbirth, or related medical conditions. The Act requires the equal treatment of women experiencing pregnancy, childbirth, or related medical conditions for all employment-related purposes. Women are assured equal treatment for group medical plan benefits. Consequently, plans must cover pregnancy as they would any other medical condition.

Women's Health and Cancer Rights Act

requires most group insurance plans that cover mastectomies to also cover breast reconstruction.

Employees may enroll in a group plan:

when first becoming eligible to participate annually during the plan's open enrollment period if there is a loss or termination of current group coverage

Conversion Privilege

Clause in a group insurance policy that allows the insured to continue the same or lesser coverage under an individual policy without having to prove insurability

Contributory Plans vs. Noncontributory Plans

Contributory Plans require participants to pay some of the premium. Do not require participants to contribute to premium payment.

Pre-Existing Conditions Under the Affordable Care Act

Coverage of pre-existing conditions changed with the ACA. Now children under age 19 who are covered under their parents' medical plan cannot be denied coverage for a pre-existing condition. As of January 1, 2014, no health insurance plan may exclude coverage of pre-existing conditions for any adult applicant or dependent. Furthermore, no health insurance plan may charge more for an applicant with a pre-existing condition than one without a pre-existing condition.

The Group Insurance Contract

The insurer issues a group insurance contract to the sponsor. A single group policy can cover many people and their dependents.

Small Group Market

A category of employee group with fewer than 10 employees. These groups are eligible for special group medical insurance policies. As required by HIPAA, each state is required to permit groups with less than ten people (including the owner) to buy group health insurance. Some states define a "small group" as 2 to 50 employees, while others define it as 1 to 50 employees.

Group plan waiting period

Employers and insurers determine the length of the waiting period, typically 30, 60, or 90 days. All new plan participants have the same waiting period, regardless of health.

Medicare carve-out plan

Sold by private insurers and managed care providers, these plans complement Medicare coverage and cost the same as coverage for younger employees. Although a carve-out plan may be offered as a retiree health plan, it is primarily intended for active employees who are eligible for Medicare.

Master Policy

The policy contract issued to the employer under a Group insurance plan. Remember, the employees covered by a group plan are considered to be insureds, but they only receive certificates.

Primary Plan

a person directly participates because he or she is employed by or associated with the plan sponsor. this plan is the main plan that pays health benefits for a person

Partially self-insured plan

an employer may share the risk of covering claims by buying stop-loss insurance coverage from an insurance company. The employer is still liable for paying claims under the plan, but only up to a certain amount before the insurer pays the rest. Stop-loss policies are most helpful to employers that could have catastrophic or numerous claims.

Insured Plan

an insurer takes the risk of covering member claims and benefits. The employer pays premiums to the insurance company just like any other insured.

Coordination of Benefits (COB)

avoids overinsurance by preventing duplication of benefits when a participant is covered by more than one group plan. (Duplicate coverage often occurs when spouses are both covered under their own group plans.)

Worksite (Employer-Sponsored) Wellness Plans

benefit employees' health and improve their productivity and job satisfaction. Wellness programs can include health education classes, weight management programs, on-site exercise facilities and discounts on gym memberships, and routine vaccinations and screenings.

Secondary Plan

coverage provided by any plan or provider it pays benefits only to the extent the primary plan does not cover the loss