📄️ 13.0 Group Health Insurance
Learning Objectives
📄️ 13.1 Characteristics of Group Insurance
Group health insurance is similar in structure to group life insurance. Employers are the most common sponsors of these plans. An employer may contract with an insurance company, HMO, or PPO to provide coverage for medical expenses, or may utilize a Third Party Administrator (TPA) to handle claims and administrative functions for a self-funded plan. These plans generally cover nonoccupational injuries or illnesses, meaning those not related to the workplace.
📄️ 13.2 Types of Eligible Groups
A group health plan is an employee welfare benefit plan that is established or maintained by an employer, an employee organization (such as a union), or both, to provide medical care to participants and their dependents, either directly or through insurance coverage.
📄️ 13.3 Marketing Considerations
Advertising
📄️ 13.4 Employer Group Health Insurance
Eligibility for Coverage
📄️ 13.5 Employer Group Underwriting Process
Most health insurance coverage today is issued on a group basis. Unlike individual underwriting, group underwriting covers all eligible members regardless of health status, age, or gender. Group plans are not permitted to discriminate in favor of executives or highly compensated employees. Instead, the group is treated as a single risk unit, and the underwriter evaluates and rates the group as a whole to guard against adverse selection.
📄️ 13.6 Change in Insurance Companies or Loss of Coverage
Coinsurance and Deductible Carryover
📄️ 13.7 Continuation of Coverage Under COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985)
This law requires employers with 20 or more employees to offer continuation of health coverage to eligible employees and their dependents for up to 18 months following certain qualifying events, including:
📄️ 13.8 HIPAA (Health Insurance Portability and Accountability Act of 1996)
The Health Insurance Portability and Accountability Act (HIPAA) was enacted to improve access to health coverage for individuals with pre-existing conditions and to ensure portability of coverage. Prior to this law, individuals with pre-existing conditions could face difficulty obtaining coverage when changing employers. HIPAA provides protections for individuals enrolling in both group and individual health plans.
📄️ 13.9 Small Employer Medical Expense Insurance
Definition of Small Employer
📄️ 13.10 Worksite Plans
These plans are voluntary benefit programs offered by insurers, with premiums typically collected through payroll deductions. They allow employees to select from a variety of coverage options to complement existing employer-sponsored benefits. The policies are issued on an individual basis and are portable, meaning employees can retain coverage after leaving employment by continuing to pay premiums directly to the insurer. Common examples of worksite insurance products include:
📄️ 13.11 Replacement of Group Policies
When replacing a group policy, the agent should provide a clear comparison of benefits between the current plan and the proposed coverage. If a new carrier replaces hospital, medical, or surgical benefits within 60 days of the prior policy’s termination, it must cover all employees and dependents who were covered—or eligible for coverage—under the previous plan as of the termination date.
📄️ 13.12 Relationship with Medicare
If an individual is age 65 or older and remains actively employed, Medicare typically serves as secondary coverage to the employer-sponsored group health plan in which the individual is enrolled.
📄️ 13.13 Additional Federal Regulation of Group Insurance
Age Discrimination in Employment Act (ADEA)
📄️ Recap of Chapter Thirteen
1. Group health insurance is issued under a single contract that covers multiple individuals, most commonly in an employment setting. The sponsor receives the Master Policy, while covered individuals receive a Certificate of Insurance or Outline of Coverage that summarizes key benefits and exclusions. 13.1