Ch 13
What are the perks of COBRA?
no evidence of insurability, provides same benefits as the group policy (including pre-existing condition coverage) and dependents must be made avail if it qualifies
What is the purpose of a probationary period in group insurance?
to help protect ag pre-existing conditions and immediate claims on new coverage - it's set by the group sponsor
Why do insurers have a min % of enrollees requirement for contributory and non-contributory plans?
to protect against adverse selection
COBRA must be offered for how long?
up to 18 months if fired (unless it was for cause), no longer FT -- if employee qualifies for soc sec disability coverage can continue for up to 29 months
What events would cause COBRA coverage to end?
1. not paying on time 2. employer drops any health ins 3. employee is eligible for Medicare (dependents can remain under COBRA) 4. employee becomes enrolled in another group health plan 5. employee converts to individual plan
When are the 2 times notification of the right to use COBRA required?
1. when a group plan commences and 2. when a qualifying event occurs
What is the max % of premiums an employer may require an employee to pay for COBRA?
102% of the premium
Once the waiting period (probationary period) is over, how long does an employee have to enroll in group ins?
30 days
For group health insurance, what is considered FT?
30 hrs a wk
What is ERISA?
Employee Retirement Income Security Act
In most cases, risk pools are independent entities governed by their own boards and administrators but in some states they function differently. How is that?
As a part of the state's department of insurance
What is the rule regarding domestic partnerships?
If a state recognizes domestic partnerships or other civil unions, if the group plan offers coverage to spouses and dependents it must also allow domestic partners.
What is the rule regarding military personnel and deployment?
If an employer d/c'd coverage during deployment, federal law says they be allowed to resume plan membership w/out any type of waiting period as long as notice is given to the insurance co directly after deployment.
How do MET's work?
It's a trust organized by a 3rd party administrator (TPA) or sponsor. It allows small to medium-sized employers to combine into a larger group for better premiums and benefits in life and health policies.
How does blanket insurance work?
It's coverage for a group of people whose membership changes frequently (common carrier, sports teams, volunteer firefighters, etc)
Are disabled dependents guaranteed continued coverage on group health?
No - it the employer decides - but must decide for 100% of employees, not just one
When a group ins contract insures people living in more than one state, which state has regulatory jurisdiction?
The poliycowner's state for their principal place of business, where they are incorporated, or the state that has the greatest # of individuals that are employed
What are risk pools and what are they used for?
They are private, self-funded health ins plans organized by a state to serve high-risk people who meet enrollment criteria and don't have access to group ins.
When a group policy is terminated or replaced, covered people who are being treated for a medical condition must continue to have their claims covered. How does that work?
When new group ins replaces existing coverage w/in 60 days of the term of the 1st policy, either the former insurer will cont paying the claim until it's resolved or the new insurer will take over the claim payments.
What is a probationary period in group insurance?
a waiting period between when someone joins the group and before they can enroll in the group plan - max probationary period is 90 days
What was the Taft-Hartley Act?
an amendment to the National Labor Relations Act - gives unions the right to establish mostly employer-funded trusts for providing health and welfare benefits to union members
When underwriting a group plan, experience or community ratings may be used. What are they?
experience is the history of claims and the community is the particular geographic region of all insureds in a group (in multi-state groups, the state with the most employees is used)
When would COBRA continue for up to 36 months?
death of employee, divorce or legal separation, employee's entitlement to Medicare or loss of dependent status
What are some examples of customer groups?
depositor, creditor and debtor groups
What are the rules on notifications for COBRA?
employees must be notified of right to COBRA w/in 14 days of qualifying event and employee must notify employer w/in 60 days if they choose to continue coverage
What does ERISA govern?
employer-sponsored retirement, welfare and benefit plans
Who must provide COBRA options?
employers with 20+ employees
Although the policyowner may have a choice in place of delivery if the above locations differ, most insurers are hesitant to do what?
issue a group contract in a state unless a corporate official can accept the contract is located in that state and primary admin duties are carried out in that state
What are the rules for an association to form?
mst have a min # of members (usually 100) and is organized for a purpose other than ins (teacher assoc, alumni assoc, for ex)
What is a MEWA?
multi-employer welfare associations - they are usually formed by larger employers for better rates - its usually employers who self-fund their employee's health insurance benefits. Doesn't have the backing of an insurance company.
What is a MET?
multiple employer trust - an entity formed by unrelated businesses in the same or similar industrial classification
If someone misses the open enrollment on a group ins plan, what are their choices?
provide evidence of insurability or wait until the next open or annual enrollment
What are the characteristics of a MET?
sponsor or TPA develops the plan, sets participation rules and administers the plan 2. group health coverage is almost always fully insured and backed by an ins co, and the trust gets the Master Policy.
If there are children covered by both parents' plans, the birthday rule applies as to which plan is primary for paying benefits. What is it?
the parent whose birthday is first in the year will be the child's primary coverage
Persistency is another important underwriting factor. What is it?
the renewal quality of a plan - preventing it from lapsing due to nonpayment or being replaced
If a group health plan changes insurers mid-year, what happens to the employees copays and deductibles?
they must be fully credited with all expenses that have already accumulated toward the deductible (includes scripts in companion or stand-alone drug plans)
Disabled dependents can continue on coverage as long as it's a mental or physical handicap and they are mostly dependent on employee for support. When must proof of incapacity and dependency be given to the insurer?
w/in 31 days of child attaining the limiting age
What does no loss-no gain legislation require?
when plan is being replaced, ongoing claims under the former policy must continue to be pd under the new policy (overriding any preexisting condition exclusions and establishing a mandatory risk transfer