Unit 18 Group Health Insurance

Question 1

characteristics of group insurance

Answer 1

insures many people in one contract
usually less expensive than individual insurance
sponsor receives the master contract
participants receive a certificate of insurance
premium
-experience rating: based on the claims history of the individual group
-community rating: based on pooling groups

Question 2

eligible groups

Answer 2

group can’t exist solely for the purpose of buying insurance
employer sponsored
multiple employers combined
-multiple employer trust (MET)
-multiple employer welfare arrangement (MEWA)
labor unions (Taft Hartley Trust)
trade or professional association
lender group (lender is paid, amount insurance no greater than the debt)

Question 3

group underwriting considerations

Answer 3

size of the group
composition of the group
flow of members through the group
plan design
contributory (employees pay part or all of cost, minimum 75% participation required) or noncontributory (employer pays entire cost, 100% participation)
persistency
administrative capability

Question 4

eligibility

Answer 4

everyone eligible can enroll
no discrimination
employer establishes basic criteria
employee (full time, actively at work, or completed probationary period if employer chooses)
enrollment - follows probationary period, usually no medical questions
open enrollment - usually once a year, no medical questions
late enrollment - medical questions

Question 5

coordination of benefits

Answer 5

applies when a person is covered by two group policies
one plan is primary, pays first
other plan is secondary, pays only if loss is greater than primary coverage
employee plan is primary
children-primary plan is parent whose birthday comes first in the calendar year (not the oldest). custody may also determine primary

Question 6

marketing considerations

Answer 6

advertising may not be misleading
group policy is regulated in the state where employer has office

Question 7

change of insurers

Answer 7

no loss or gain in benefits for a current claim

Question 8

termination of group coverage

Answer 8

employer terminates the plan
employer didn’t pay the premium
employee quits, is laid off, or has a reduction in hours
dependents may lose coverage if divorce, employee dies, employee’s employment is terminated, or too old (age 26)

Question 9

COBRA/ OBRA

Answer 9

COBRA
-federal law
-applies to employers who regularly employ 20+ people
-employers must allow employees or dependents to remain on the group plan
-applies to medical and dental (not life) insurance
-option to elect expires 60 days after an individual receives the notification
-extends coverage for 18 months for the employee if employment is terminated or a reduction in hours
-extends coverage for 36 months for dependents if no longer qualify due to divorce, too old, or death of employee
-premium is 102% of the regular group premium. employer does not contribute
-COBRA automatically ends if premium is not paid, employer stops the group plan, individual becomes covered by another plan, individual becomes eligible for Medicare

OBRA
-must meet social security definition of disability
-29 months if disabled at the time of termination

Question 10

HIPAA

Answer 10

preexisting conditions defined
mandated benefits for small employers, self-employed, pregnant women, mentally ill
guaranteed 48-hour hospital stay for new mothers after regular delivery and 96 hours for a C-section
small employers cannot be denied
privacy disclosures