Unit 32: Group Health Insurance Flashcards
Page 455
Who applies for and provides info for group health insurance?
Employer
What is a contributory plan?
employee (individual) contributes to premium payments
What is a non-contributory plan
employee does NOT contribute to premium payments (employer pays all)
Page 453
What is the difference between evaluating individual health insurance policies vs. group?
see photo
In indiv, each person evaluated separately (risks, hazards, etc.)
In group eval, “no individual selection,” all eligible people included regardless of health, age, etc.
What happens if someone in the group does not apply for coverage during a specified eligibility period?
required to take a physical exam and will be selected/evaluated on an indiv basis
Page 454
What is adverse selection?
selection of too many bad risks (in a large enough group, there are usually enough very healthy people to offset insuring unhealthy)
That’s why after eligibility period has passed, indiv are evaluated separately.
Page 456, 457, 458
What factors do the insurance companies consider when determining group premiums?
- Average age of group
- length of waiting/elimination period for loss of time benefits
- maximum indemnity period for loss of time benefits
- occupational hazard rates (greater risk = higher rate
Handwritten note adds #5
mix of male/female – person wrote on page (female, the higher the premium, maybe meaning more females is higher rate cuz of childbirth or living longer???)
Page 456 (out of order, back to the contributory/non-contributory topic from page 455)
What are the enrollment percentage requirements for CONTRIBUTORY group health plan?
A high percentage of eligible people (75% or more) must want to be included and must participate.
What are the enrollment percentage requirements for NON-CONTRIBUTORY group health plan?
100% of eligible employees must be included (employer pays all)
Who receives a master policy in group insurance?
employer
What type of written documentation do the indiv in group plan get?
Certificates of Insurance
(certifying that coverage exists)
Page 460
What is Coordination of Benefits Provision
a special provision designed to give insureds as much coverage possible while eliminating overinsurance
What do group coverage provisions do?
- describe who is eligible for the group plan
- Describe when individuals become eligible for the plan
- Specify the minimum number of individuals in a minimum participation by eligible people required to sustain the plan
- Specified amount of insurance to which individual group members are entitled
- Describe the responsibilities of a master policy owner
In double coverage situations, what is the insurer covering the employee who has the claim called and how much do they pay?
“primary insurance company”
must pay as much of claim as policy permits
they pay pay the claim as if there were no double coverage
What does the secondary insurance company pay on a double coverage claim?
whatever the primary company will not pay, within its policy limits
Instead of gender-based coordination of benefits (if mother and father both have insur, father’s usually would be used), what is used to decide which plan is primary?
Plan of parent whose birthday comes first in the calendar year is primary, other spouse’s is secondary.
Page 461
What is COBRA?
Extended group health insurance coverage for an employee after he/she leaves their job. (Usually only applies if co. regularly employees more than 20 people)
What other options do terminated employees have for health insurance?
They can covert their group policy to inidividual within 31 days of temination
What happens if an employer discontinues group insur?
Employees must have opportun to convert to indiv insurance without med. exam or evidence of insurability. (just roll over the policy, i guess)
Page 462
How does COBRA apply to employee’s dependents?
same extensions and privileges are available to dependents
if employee dies, spouse/kids can still get group coverage
Page 463
How is pregnancy now treated in indiv and group policies?
Previously treated differently from other med conditions.
Now, preg/birth/related med expenses treated same as other conditions
What is ERISA?
Employee Retirement Income Security Act
- enacted to protect interests of participants in employee benefit plan. Protects beneficiaries also
What are the 3 “Other” Forms of group insurance?
Blanket policies, Franchise policies, and Multiple employer trusts (METS)
Page 464
What is a self-insured fund?
an employer provides health benefits by depositing $ into a fund instead of paying premiums to an outside provider. If there’s an employee med claim, reimbursement comes from this fund
Page 465
Is it risky for an employer to self-insure?
It can be. While it can relieve the payment of premiums to an outside insurer, a catastrophic loss could be devastating even to a large employer
What are Third-Party Administrators?
Called TPAs. (companies can not staff their own self-insur plan) Outside organizations must administer the self-insurance plan on behalf of a co.
Can actual insurance companies supply these services (instead of a third party)
Yes. They are provided under and ASO (Administrative Services Only) contract
Page 466
What are Blanket [health] Policies?
Groups of indefinite number and composition (students, church groups, volunteer fire, etc.), don’t qualify from group health insur.
They can get coverage at group rates under blanket insur.
What is Franchise insurance?
Very small businesses/groups without enough members can qualify for some of the group health insur benefits (especially the lower costs) under franchise insurance
How does Franchise insurance work?
Much like group insurance but there is no master policy (for the employer). Each member gets an indiv policy
Page 467
What is the purpose of METs (Multiple Employer Trusts)?
provides traditional group medical coverage to a small group of employers with no type of association group health insur (or not enough employees for their own direct insur plan)
How are METs able to purchase group health insur?
A separate trust is created to purchase group health coverage for employers
Who holds the master policy in METs?
The trust
Page 452 (THIS IS OUT OF ORDER - This page was buried in pages for Unit 31 - just saw it)
What is “group” insurance?
A single policy covering many diff people, a group, rather than covering just one person as individual policies do
What is the requirement to be considered a group (for insurance purposes)?
have same employer or some other common affiliation of interests (like a chamber of commerce, Lodge, etc.)
What are the two points to remember about group insurance?
- Group insur covers group of people - must meet specific minimum number of people
- Group must be from same employer or mutual interest. Group must be a legit organization, not just formed to buy group insurance
What is a master policy? How does the application work?
One single policy that is issued to one of the gradual entity representing the whole group of people. The person who owns that is the master policy owner
The master policy owner applies for coverage for the group. They own and hold the master policy that covers everyone in the group. And they collect to make premium payments to the insurer when
