Group Health Insurance

Noncontributory Plan

100% of the eligible employees must be included and the participants do not pay part of the premium.

Certificate of Insurance

A document provided by an insurance company as proof that a policy has been issued and coverage is in effect. This document is provided to the individuals covered under the group insurance contract.

30 Day Open Enrollment Period

Available once a year to employees who reject coverage during the initial enrollment period and later wish to have coverage or add dependent coverage. Evidence of insurability is not required. In most cases, an 18-month probationary period for pre-existing conditions coverage will apply.

Dependent Eligibility

Dependents of an employee can be: a spouse, a child younger than 19 which includes step-children, legally adopted children, children legally placed for adoption, unmarried children between ages 19 and 23 when they are full time students, and unmarried disabled children older than 19 who are incapable of self-support.

Contributory Plan

Eligible employees contribute to payment of the premium. At least 75% of the employees must participate in the plan.

Medicare Secondary Rules

Employed individuals aged 65 or older are primarily covered by Medicare; however, there are the following exceptions: for individuals working for employers with 20 or more employees, the health insurance company for the employer would be the primary health provider and medicare would be the secondary provider. Employed individuals treated for end-stage renal disease or receiving kidney transplants are primarily covered by the health company for the employer for the first 30 months, then medicare would become primary.

Eligibility

Employee usually must be full time and have served from one to three months of employment service.

Change of Insurance Companies

Employees actively at work on the date coverage is transferred to another insurance carrier are automatically covered under the new plan and they are exempt from any probationary period. Employees NOT actively at work on the date coverage is transferred must be included in the new plan, but their benefits can be limited to the prior plan's level until they return to work.

Small Employer Medical Plans

Every small employer carrier is required to actively offer to small employers at least 2 health benefit plans. One plan must be basic, and one plan must be a standard benefit plan. Small employer means any person, firm, corporation etc that is actively engaged in business, on at least 50% of its working days during the preceding year, employed at least 1 and not more than 50 eligible employees.

Events That Terminate Coverage

For employees: employment termination, employee ceases to be eligible, the date the overall maximum benefit for major medical benefits is received, the end of the last period for which the employee has made the required premium payments come about, and if the master contract is terminated. For dependents: dependent fails to meet definition of a dependent, the date the overall maximum benefit for major medical benefits is received, and the end of the last period for which the employee has made the required premium for dependent coverage passes.

Which state law has jurisdiction over the policy?

Generally speaking, the state in which the coverage was delivered would have jurisdiction.

Extension of Benefits

If an employee or its dependent are totally disabled. This benefit is provided up to a period of 12 months or until the individual is no longer totally or continuously disabled.

Master Policy

Issued to the employer under a group plan; contains all the insuring clauses defining employee benefits.

Pregnancy Discrimination Act

Law that requires pregnant employees to be treated like all other employees when determining benefits. This act applies to employers with 15 or more employees.

Multiple-Employer Trusts

Made up of two or more employers in similar or related businesses who do not qualify for group insurance on their own. Once the trust fund is established, it can pay for employees' health care expenses directly. (self-funding) The trustee has charge of the funds and all financial activities occur through it.

Order of Payment in a COB Provision

Married couple where both have group coverage and are each named as dependents on the other's policy: the person's own group coverage would be considered primary. The secondary coverage (the spouse's coverage) would pick up where the first policy left off. When both parents name their children as dependents: will be determined by the birthday rule; the coverage of the parent whose birthday is earlier in the year will be considered primary. When parents are divorced or separated: the policy of the parent who has custody of the children would be considered primary.

Experience Rating

Premiums are determined by the experience of this particular group as a whole.

Creditor Group

Protects the lending institution from losing money as a result of a borrower's death or disability. Generally the borrower is the premium payer but the lending institution is the beneficiary of the policy.

Employer-Sponsored Group

Provides group coverage to it's employees.

COBRA

Requires any employer with 20 or more employees to extend group health coverage to terminated employees and their families after a qualifying event. Qualifying events include: voluntary termination of employment, termination of employment for reasons under than gross misconduct, and employment status change: from full time to part time. Coverage would be extended up to 18 months. The terminated employee must exercise extension of benefits under COBRA within 60 days of separation from employment. For events such as death, benefits will be extended for dependents for 36 months.

Coordination of Benefits Provision

The purpose of this provision is to avoid duplication of benefit payments and overinsurance when an individual is covered under multiple group health insurance plans. This provision limits the total amount of claims paid from all insurers covering the patient to no more than the total allowable medical expenses. The provision establishes which plan is the primary plan (the plan that is responsible for providing the full benefit amounts as it specifies).

Underwriting Group Health Insurance

The underwriter evaluates the group has a whole rather than each individual member. In groups of 50 or more, medical information cannot be required of plan participants.

Coinsurance and Deductible Carryover

These may be carried over from the old plan to the new plan. The purpose of this type of provision is to credit expenses incurred so as to not penalize the insured.

No loss No Gain

These statutes involve the theory of indemnification and the concept if placing the insured in the same economic position after a loss as the insured was in prior to a loss. When changing health insurance, benefits must be paid for ongoing claims regardless of pre-existing conditions.

Community Rating

With individual policies, the premium is based upon the overall claims experience of the insurance company.