Unit 18 Group Health Insurance Flashcards
The individual members covered by the group plan are not parties to the group plan insurance contract and have no authority to make decisions regarding the plan. Members receive a ____ that provides evidence of coverage, who is covered by the plan, and summarizes benefits.
Certificate of Coverage
____ rating is a method of establishing the premium on the group’s previous claims experience. The larger and more homogenous the group, the closer it comes tot reflecting standard mortality and morbidity rates.
____ rating sets premium costs by using the same rate structure for all subscribers to a medical expense plan, no matter what their past loss experience has been.
Experience Rating
Community Rating
Eligible Groups: The general eligibility rule is; a group must have been formed for a purpose other than obtaining insurance for its members. This defines a ____ group. The insurance must be INCIDENTAL to the group rather than its primary reason for being.
Natural Group
Name the 6 types of eligible groups for group insurance:
- Employer Group Plans
- Multiple Employer Trust (MET)
- Multiple Employment Welfare Arrangements (MEWAs)
- Labor Union
- Association Group Plans
- Credit Disability Plans
Types of Eligible Group Plans
____ - an employer may sponsor a group insurance plan for its employees.
____ - is a group of small employers in the same industry who either form together to purchase group insurance as one entity or self-fund a plan
Employer Group Plans
Multiple Employer Trust (MET)
Types of Eligible Group Plans
____(MEWAs) - provide health and welfare benefits to two or more unrelated employers. The purpose is to provide affordable health coverage to small employers.
____ - these can sponsor a group insurance plan for its members or two or more of these can join together to provide group insurance for their collective members. These plans are sponsored under a Taft-Hartley Trust.
Multiple Employment Welfare Arrangements (MEWA)
Labor Unions
Types of Eligible Group Plans
____ - a trade, professional, or other type of association may sponsor a group plan for its members.
____ - a lender, or creditor, may sponsor a group health (disability) insurance plan for its group of debtors.
Association Group Plans
Group Credit Disability Insurance
Name the 7 group underwriting criteria:
- Size of the group
- Composition of the group
- Flow of members through the group
- Plan design
- Contributory or noncontributory
- Persistency
- Admin capability
Size of the Group
Small group = 2 to ____ lives
Large group = ____ or more lives
50
51
Group Underwriting Criteria:
- ____ - larger groups can more likely avoid adverse selection
- Composition of the group - ages, sex, and income of the members of the group will affect the potential benefits that will be paid
- ____ - individuals joining and leaving the group on a regular basis reduces the risk of adverse selection
- ____ - what will be covered, and for how much
- ____ - employees pay part of the cost in contributory plans, and at least 75% of those eligible must participate in the plan; the employer pays the entire cost in a noncontributory plan, and 100% of eligible employees must participate
- ____ - when employers keep their group coverage with the same insurer year after year, the insurer’s expenses are reduced
- ____ - large employers can lower group premium costs by helping administer the plan and use the insurer for stop-loss coverage and/or claims processing
- Size of the group
- Composition of the group
- Flow of members through the group
- Plan design
- Contributory or noncontributory
- Persistency
- Admin capability
Employers cannot discriminate with group benefits. All employees that are eligible can enroll regardless of their age, handicaps, or sex. ____ and ____ must be treated like any other covered condition. Employers can establish basic employment criteria. The employee must be:
1. ____ time
2. ____ - that is, not on disability leave or other inactive status
Employers may also exclude ____ as a class, since their compensation and benefits are covered by a collective bargaining agreement.
Pregnancy and Maternity
Full-time
Actively at work
Union Workers
Dependent Eligibility
Coverage must also be made available to a participating employee’s spouse or children up to age 26. This includes ____ and adopted children, and it applies whether the child is ____ or a student. Coverage may also be made available to a participating employee’s dependent ____.
Step-children
Married
Parents
During a ____ period new employees must wait before they can enroll in an employer’s group health insurance plan. These periods usually range from 1 to ____ months.
Probabtionary
6
When the probationary period ends, new employees can enroll in the group health insurance plan during the ____ or ____ period, which is typically ____ or ____ days.
Eligibility or Enrollment
30 or 31 Days
Most states require insurers to also offer an ____ period every year. Individuals who declined coverage during the initial eligibility period can enroll in the health plan during this period without providing evidence of insurability.
Late enrollees - individuals who want to enroll for coverage at any time other than the initial eligibility period or an annual open enrollment period may be required to provide evidence of ____.
Open Enrollment
Insurability
To avoid over-insurance (married couples each having their own insurance and being on their partner’s insurance) group health insurance policies contain a ____ provision which says that if a loss is payable under two group health insurance plans, one plan will be considered primary. The primary plan pays benefits up to its limit first, and the secondary insurance plan will pay up to its limit for costs not covered by the primary plan.
Coordination of Benefits
With a married couple, the ____ plan is the individual’s employer plan, and the ____ plan is the spouse’s employer plan.
A rule called the “____” is used to determine the primary plan if a married couple has children. The parent whose birthday comes earliest during the year will use their plan as primary coverage for their children. If parents are separated or divorced, the plan of the parent with custody is ____, barring any other legal arrangements.
Primary Plan
Secondary Plan
Birthday Rule
Primary
____ requires, by state laws, that benefits paid by an in-force policy continue after the policy is terminated. Some states require an extension of benefits to a totally disabled member at the time of policy discontinuance.
Extension of Benefits
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that requires employers with ____ or more employees to allow former employees and their dependents to continue the benefits provided by the employer’s group health insurance plan. Coverage may be continued for ____ to ____ months. Employees or dependents remain on the group plan but must pay the entire premium for the coverage. COBRA specifies rates, coverage, qualifying events, etc. for the continued insurance.
20 or more employees
18 to 36 months
Many states have ____ statutes that require benefits for onging (disability) claims that started under an old plan to continue without imposing the new plan’s eligibility requirements.
No loss, no gain
A qualifying event occurs when an employee, spouse, or dependent child lose coverage under the group insurance contract. Qualifying events include:
1. ____ of a covered employee
2. Termination of a covered employee, except for ____
3. ____ of work hours for a covered employee
4. ____ or legal separation of a covered employee from the covered employee’s spouse
5. ____ of a child’s dependent status
6. ____ of the employer
- Death
- Gross misconduct
- Reduction
- Divorce
- Termination
- Bankruptcy
A ____ beneficiary is any individual covered under an employer-maintained group health care plan on the day before a qualifying event. Usually this includes:
1. Covered employees
2. ____ of covered employees
3. ____ of covered employees, including children born or adopted during the first ____ months of a benefit continuation period.
Qualified Beneficiary
1. Covered
2. Spouse
3. Dependent Children
Employers must provide notification statements to individuals eligible for COBRA continuation within ____ days. This notification must be provided when:
1. A plan becomes subject to COBRA
2. An employee is covered by a plan subject to COBRA
3. a ____ event occurs
The company must notify new employees of their rights under ____ when they are informed of other employee benefits.
The option to elect continuation expires ____ days after an individual receives the notification.
14 Days
Qualifying Event
COBRA
60 Days
COBRA
The maximum period of coverage continuation for termination of employment or a reduction in hours of employment is ____ months. For all other qualifying events, the maximum period of coverage is ____ months.
Employee must pay ALL of the premium and may have to also pay an additional amount each month not exceeding ____% of the premium to cover the employer’s admin expenses.
18 months
36 months
2%
