Chapter 10 - Group Accident & Health Insurance

Every small employer carrier must actively offer to small employers at least how many health benefit plans

2 plans. As a condition of transacting business in this state with small employers, every small employer carrier is required to actively offer to small employers at least 2 health benefit plans. One basic and one standard.

One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of

50 or more

Jason is insured under his employer's group health insurance. He splits the cost of the premiums with his employer. This is an example of

A contributory plan. With a contributory plan the eligible employees contribute to payment of the premium (both the employee and employer pay part of the premium).

Kevin and Nancy are married, Kevin is the primary breadwinner and has a health insurance policy that covers both him and his wife. Nancy has an illness that requires significant medical attention. Kevin and Nancy decide to legally separate, which means that Nancy will no longer be eligible for health insurance coverage under Kevin. Which of the following options would be best for Nancy at this point?

COBRA. Dependents of employees are eligible to receive group health insurance under the employees plan. If the employee and the dependent become legally separated or divorced, or if the employee dies, the dependent will be eligible for COBRA benefits for up to 36 months. This is best for Nancy, since she has endured a long-term illness. Otherwise, being approved for individual health insurance would be difficult.

What is the benefit of experience rating?

It allows employers with low claims experience to get lower premiums. Group health insurance is usually subject to experience rating where the premiums are determined by the experience of this particular group as a whole. Experience rating helps employers with low claims experience because they get lower premiums.

When compared with the administrative cost found in individual coverage, the per capita administrative cost in group health insurance is

Lower

In group insurance what is the policy called?

Master Policy

The classification Small Employer means any person actively engaged in a business that on at least 50% of its working days during the preceding year employed

No more than 50 employees. Classification rules established by the Insurance Code state that Small Employer means any person actively engaged in a business that on at least 50% of its working days during the proceeding quarter employed at least 2, but not more than 50 eligible employees.

A 55-year old employee has worked part-time for his new employer for 3 months now, but has not been offered health insurance. What factor has limited the employee's eligibility?

Number of hours worked. In order to be eligible for group health insurance through an employer, an employee must typically work full-time and must have devoted one to three months of service. In this case, the employee has been with the employer long enough, but he does not work enough hours per week.

What type of information is NOT included in a certificate of insurance

The cost the company is paying for monthly premiums. The individuals covered under the insurance contract are issued certificates of insurance. The certificate tells what is covered in the policy, how to file a claim, how long the coverage will last, and how to convert the policy to an individual policy.

Which of the following statements concerning group health insurance is CORRECT?

The employer is the policy holder. The employer receives the master policy; each employee receives a certificate of insurance. All employees have the same coverage under the master contract.

In a group policy, who is issued a certificate of insurance?

The individual insured. The individuals covered under a group insurance contract are issued certificates of insurance.

Which state has jurisdiction over a group policy that covers individuals that reside in more than one state

The state in which the policy was delivered. Group insurance can often provide coverage for employees in more than one state. The state in which the coverage was delivered would have jurisdiction.

Why do group health providers usually require a certain amount of participation in the plan by eligible employees?

To guard against adverse selection and reduce cost. The reason for the minimum participation requirement is to guard against adverse selection and to reduce administrative costs for the insurer.

What is the purpose of COBRA?

To provide continuation of coverage for terminated employees. It requires any employer with 20 or more employees to extend group health coverage to terminated employees and their families after a qualifying event.