Group health insurance

there is no waiting period if the eligible individual has not had any creditable coverage for the___months prior to the effective date of coverage

18

Length of coverage for COBRA

18 months after qualifying even 36 months for dependents after events such as death of employee, divorce, or legal separation

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

2 plans

COBRA applies to employers with at least

20 employees

For such events as death of the employee, divorce of legal separation the period is __ months for the dependents

36 months

The terminated employee must exercise extension of benefits under COBRA within __ days of separation from employment

60 days The employer is permitted to collect a premium from the terminated employee at a rate of no more than 102% of the individuals group premium rate. The 2% change is to cover the employers administrative costs

Marketing considerations

Advertising, health insurance ads must be truthful and not misleading. Words and phrases may not be used if heir meaning is clear only by implication or familiarity with insurance terminology.

pregnancy discimination act of 1987

An amendment to the civil rights act, states that pregnancy, childbirth and any related medical conditions must be covered to the same extent as any other medical condition under the policy. Applies to employers with 15 or more employees

Small employer

Any person, firm, corporation, partnership, or association that is actively engaged in business on at-least 50% of its working days during the preceding year, and has 50 employees or less.

Cobra benefits apply to group health insurance not group life insurance.

COBRA continues the same group coverage the employee had and the employee pays the group premium that the employer paid (or employer/employee both paid in contributory plans)

Certificate of coverage

Cannot contains statements that are unfair, misleading or deceptive. 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 the individuals covered under a group insurance plan are issued evidence of coverage - in the form of certificates of insurance

Small group continuation

Carrier must offer continuation coverage under a health benefit plan issued to a small business to any qualified beneficiary who would lose coverage under that health benefit plan as the result of a qualified beneficiary who would lose coverage under that health benefit plan as the result of a qualifying event and who makes a written election for continued coverage under the health plan within the reelection period Coverage continuation rules are the same as for large group plans

Group underwriting criteria:

Certificates are guaranteed issue with no individual underwriting premiums are determined by age, sex and occupation of the entire group the reasons for forming the group are other than purchasing insurance a certain participation level must be maintained there is a flow of new members through the group there is an automatic determination of benefits which is not discriminatory (everyone has the same coverage)

GROUP INSURANCE

Characteristics: group formed for a purpose other than obtaining group heath insurance, master policy -issued to the group sponsor, certificates of insurance - evidence of coverage for the insured, experience rating: premium based on group as a whole, community rating: premium based on insurer claims experience Types of eligible groups: employer sponsored - individual or multiple employer trust (MET), association - alumni or professional Marketing consideration: advertising - trustful and non misleading, jurisdiction - coverage for more than one state, approved in issuing state Underwriting: every eligible member of group must be covered regardless of physical condition, age, sex, or occupation, evidence of insurability is generally not required, 30day open enrollment period, probationary employees must work a total of 30 hours per week Provisions: conversion to individual coverage - within 31 days without evidence of insurability, coordination of benefits, change of insurers - carryover of coinsurance and deductibles

Patient Protection and Affordable Care Act

Coverage for children of the insured must extend until the adult child reaches the age of 26. The same age limit apples to COBRA coverage for eligible children of the insured In the event of loss of dependent child status under the group plan, the dependent child qualifies for a maximum period of continuation coverage of 36 months

Employee Eligibility

Employer group health insurance generally requires that t be eligible for coverage an employee must be a full-time employee, working in a covered classification and must b actively at work

In health insurance, persistency is important for the following main reasons:

Expenses are higher during the first year than in the subsequent years because of the costs of issuing the policy and certificates of insurance and higher first-year commissions Claim rates usually increase as the age of the insured increases

What type of group rating uses the actual experience of the group as a factor in developing the rates to be changed?

Experience rating

Plan design factors

Group insurance may be either contributory or non contributory contributory - plan involved the eligible employees to contribute to payment of the premium (both employer and employee pay) 75% of eligible employees must be included if a plan is non contributory - the employer will pay the entire premium but 100% of eligible employees must be included

HIPAA

Health Insurance Portability and Accountability Act is a federal law that protects health information

If all policies have a COB provision, the order of payment is as follows:

If a married couple both have group coverage in which they are each named as dependents on the other's policy, then the person's own group coverage will be considered primary. The secondary coverage (the spouses coverage) will pick up where the first policy left off if both parents name their children as dependents under their policies, then the order of payment will usually be determined by the birthday rule, the coverage fo the parent whose birthday is earlier in the year will be considered primary. Occasionally the gender rule may also apply according to which the fathers coverage is considered primary is the parents are divorces or separated, the policy of the parent who has custody of the children will be primary

Creditor groups

If someone loans you money they may suggest that you take out a group disability policy policy would pay benefit to creditor to pay off loan on your behalf if you become disabled

Characterics of group insurance

In a group policy, the contract is between the insurance company and the group sponsor (the employer, union, trust, or other sponsoring organizations) as opposed to the individual policy where the contract is between the insurance company and the insured

Group contract

In group insurance the policy is called the master policy, and is issued to the policyowner, which could be the employer, an association, a union, or a trust.

What is the benefit of experience rating?

It allows employers with low claims experience to get lower premiums.

Medicare carve-outs and supplements

Medicare caret and supplement plans are available to individuals enrolled in medicare and act as excess insurance that pays for covered expenses not paid by medicare such as deductibles or copayments

METs

Multiple Employer Trusts A group of several small employers in the same industry (5 small bakeries)

MEWAs

Multiple employer welfare arrangements

Non discrimination

No insured in the commonwealth may refuse to issue or reissue accident and sickness insurance for any of the following reasons: blindness deafness abuse exposure to diethystilbestol

Which of the following factors would be an underwriting consideration for a small employer carrier?

Percentage of participation

Persistency factors

Persistency rate for a group of policies means that ratio of the number of policies that continue coverage on a premium due date to the number of policy duration. the underwriter takes persistency into consideration because groups that change insurance companies every year do not represent a good risk

If a firm has between 1 and 50 employees that are actively engaged in business on at least 50% of its working days, during the preceding calendar year, what is its classification?

Small employer

Individual employer groups

The individual employer normally will provide insurance coverage to all full-time employees. The employer can specify within some limitation how many hours and considered full time, and whether both salaried and hourly employees will be covered. The employer can legally exclude a particular group of employees, like union or part time from the eligible class of employees.

Employer group health inurance

The majority of all health insurance in force today is provided on a group basis. The cost of group health insurance is lower than the cost for individual coverage sign the administrative costs and selling expenses found in group health insurance are far less.

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.

persistency

The tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer.

Insurer Underwriting Criteria

The underwriter evaluates the group as a whole rather than each individual member. The group's risk profile determines whether the group will be accepted or rejected. Tries to avoid adverse selection, which is the tendency of poorer risks seeking out insurance protection

Annual open-enrollment period

a 30 day open enrollment period is available once a year to employees who reject coverage during the initial enrollment period and later wish to have coverage or to add dependent coverage. Evidence of insurability is not required during an open enrollment. Each year enroll an eligible individual who does not meet the prior creditable coverage requirements during the open enrollment period. The coverage become effective on the first day of the month following enrollment

debtor

a borrower of funds

Creditor

a lender of funds

A standard benefit plan

a managed care plan developed in conjunction with the health benefit plan committee that provides better benefits at a higher cost than the basic care plan

self funded programs

a noninsured plan that uses a trust fund to pay for employees health care expenses

extensions of benefits

a provision that allows coverage beyond the policy expiration date for employees who are not actively at work due to disability or who have dependents hospitalized on that date (coverage continued only until the employee returns to work or the dependent leaves the hospital)

Renewability

a small employer medical plan must be renewable with respect to al eligible employees and dependents, at the option of the small employer, except in any of the following cases: nonpayment of required premiums fraud or misrepresentation noncompliance with the carriers minimum participation or employer contribution requirements repeated issue of a provider network provision the small employer carrier elects to non renew all of its health benefit plans delivered or issued for delivery to small employers the department of insurance finds that the continuation of the coverage would not be in the best interests of the policyholders or may impair the carriers ability to meet its contractual obligations

Employer group health insurance generally requires a dependent of an employee to be

a spouse a child younger than the limiting age, including natural children of the insured, stepchildren, children legally placed for adoption, and legally adopted children disabled children who are incapable of self support because of a physical or mental disability and are dependent upon the insured for support and maintenance most insurers cover domestic or same sex partners whether or not a state has a domestic partner or civil union law

Community rating

aka pool rating, premium is based upon overall claims experience of the insurance company. Experience rating helps employers with low claims experience because they get lower premiums Individual insurance policies are subject to this

Loss minus

amount covered by primary plan =amount covered by secondary plan

Availability and eligibility

any health benefit plan that a carrier makes available for one small business must be made available for all small businesses if a carrier denies coverage for any eligible small business that has met all applicable requirements the carrier may not accept any new eligible small business. Any carrier that denies coverage for a small business must provide the small business with the specific reasons for denial of coverage in writing

Benefit plans offered

as a condition of transacting business in this state with small employers, ever small employer carrier is required to actively offer to small employers at least 2 health benefits plans: basic health benefit plan standard health benefit plan

for dependents

coverage will terminate for a dependent on the earliest date in which on oof the following situations occurs: the dependent fails to meet the definition of a dependent 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 for dependent coverage passes

Change of insurance companies or loss of coverage

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.

Certificate of coverage

employees covered by insurance proof of insured

There are 2 types of groups eligible for insurance

employer-sponsored association sponsored

Under the ACA,

employers must extend coverage to all employees who work more than 30 hours per week. Small and large employers may not be denied coverage for failure to satisfy the minimum participation or contribution requirements

Employees terminated as a result of a business closing must have health insurance coverage extended for at least 90 days from the termination date.

extended coverage will cease upon the employee receiving similar benefits from another plan

There are several disqualify events under which the COBRA benefits may be discontinues, these include

failure to make payments, becoming covered under another group plan, becoming eligible for medicare, or if the employer terminates all group health plans

for employees

generally coverage will terminate for an employee on the earliest date in which one of the following occurs: employment terminates the 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 payment comes about the master contract is terminated

eligibility for coverage

group health plans commonly impose a set of eligibility requirements that must be met before an individual member is eligible to participate in the group plan. It is common that in order to be eligible, the employee must be full time (usually 30 hours per week, and have been employed by the employer from 1 to 3 months.

Regulatory jurisdiction and place of delivery

group insurance can often provide coverage for employees in more than one state. The question then becomes which state law has jurisdiction over the policy. Generally, the state in which the overage was delivered would have jurisdiction. Most state laws governing group insurance say that multistage policies are acceptable if the policy is approved by the issuing state, written that multistage policies are acceptable if the policy is approved by the issuing state, written in substantial compliance with the laws of the delivery state, and if the laws governing gore insurance are substantially similar between the issuing state and the delivery state.

events that terminate coverage

group insurance policies provide for a termination of benefits in the event of certain occurrences

For individuals who are 65 or older and currently employee (or insured under a working spouses group plan working for an employer who has 20 or more employees

group plan is primary medicare is secondary

For individuals who are edibles for medicare due to end-stage renal disease (ESRD)

group plan is primary FOR THE FIRST 30 MONTHS medicare is secondaryFOR THE FIRST 30 MONTHS and PRIMARY AFTER!!!

Fore individuals who are 65 or older and currently employee (or insured under a working spouses group plan) working for an employer who has less than 20 employees

group plan is secondary medicare is primary

the reason for participation requirements:

guard the insurer against adverse selection and to reduce administrative costs.

Basic care

managed plan developed in conduction with the health benefit plan committee a lower in cost the the standard benefit plan

Relationship with medicare

medicare secondary rules when a person is insured under an employers group health coverage, also qualifies for medicare, it is important to determine which coverage is primary (pays first) and which is secondary (pays second)

The COB provision establishes which plan is the primary plan, or the plan that is responsible for providing the full benefit amount as it specifies.

once the primary plan has paid its full promised benefit amount the insured submits the claim to the secondary or excess provider for any amount the insured receives exceed the costs incurred or the Total maximum benefits available under all plans.

Characteristics of group

one of the differences between group underwriting and individual underwriting is that in groups of 50 or more, medical information cannot be required of plan participants. in small groups, even one bad risk can have an impact on the claims experience of the group. Thats why in some states, insurers may allow some individual underwriting in small groups they insure

Under COBRA (consolidated omnibus budget reconciliation act)

requires employer with 20 or more employees to extend group health coverage to terminated employees and their families after a qualifying event: voluntary termination of employment termination of employment for reasons other than gross misconduct (company downsizing) employment status change from full time to part time For any of these qualifying events, coverage is extended up to 18 months

underwritting

risk selection and classification process

no loss no gain

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

Employer sponsored group

the employer (a partnership, corporation or a sole proprietorship) provides coverage to its employees. Eligible employees usually must meet certain time of service requirements and work full time. The same as group life insurance, group health insurance may be either contributory or noncontributory

In a group policy, the contract is between

the employer and the insurance company

IN order to quality for group coverage,

the group must b reformed for a purpose other than obtaining group health insurance. The coverage must be incidental to the group.

guidelines

the law outline regulations for employers to prevent pregnancy discrimination: a woman cannot be fired just because she is or may become pregnant an employer cannot refuse to hire a woman simply because she is or may become pregnant an employer cannot force a woman to stop working and take pregnancy leave if she is still willing and able to work in most cases an employer cannot hire or fire a woman because she has had or is considering an abortion

administrative capability

the per-capita administrative cost in group insurance is less than the administrative cost found in individual coverage.

Experience rating

the premiums are determined by the experience of this particular group as a whole group health insurance is usually subject to this

Coordination of benefits provision

the purpose of the coordination of benefits (COB provision) found only in group health plan, 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.

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

continuation of coverage under COBRA and Massachusetts specific rules

there have been a number of state and federal statues passed in recent years to protect insured when their employment is terminated.

coinsurance and deductible carryover

these may be carried over for the old plan to the new plan, the purpose of coinsurance and deductible carryover provisions is to credit expenses incurred so as to not penalize the insured

Qualifying events for COBRA

voluntary termination of employment termination of employment for reasons other than gross misconduct (like downsizing) employment status change:full time to part time

Extension of benefits

when a group policy is discontinued, the policy must provide for a reasonable extension of benefits to any covered person who is totally disabled at the time the group policy is terminated

In advertisements of benefits payable, losses covered, and premiums payable..

words, phrases, or illustrations cannot be used in a manner which misleads or has the tendency or capacity to deceive, concerning any policy benefit payable, loss covered, or premium payable.