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SolveYourProblem
eLearning Series:
Health Insurance: Your Questions Answered
What does everything mean & how
to choose the right policy
( 18 pages )
GROUP
HEALTH INSURANCE POLICY TYPES
Group
policy types. Group health plans may include any
of several types of insurance discussed earlier. With no
intention of becoming repetitive, let’s review some of
those individual coverages. A group health plan doesn’t
have to include all coverages although most will include
at least two or more. In addition, disability income coverage
may be offered in a group arrangement but it is usually
separate from hospital, medical and surgical coverage.
Therefore, the
first possible group coverage pays benefits for lost earnings
resulting from accident or sickness and is commonly called
disability insurance.
Accidental loss
of life and accidental loss of one or more limbs or eyesight
is another common type.
Hospital expense
is another type of potential group coverage. These policies
can pay for hospital expenses whether inpatient or outpatient.
Fees of an attending physician during hospital treatment
may be covered. Some types of group policies may only cover
surgical expenses.
Further, there
are a number of provisions that apply only or primarily to
group policies. These provisions:
- Describe who
is eligible for the group plan
- Describe when
individuals become eligible for the plan
- Specify minimum
number of participants and minimum participation by eligible
people necessary to sustain the plan
- Specify amount
of insurance that individual group members are entitled
- Describe the
responsibilities of the master policy owner
We discussed earlier
that not all members of a group are necessarily eligible
under a group plan. Also, the employer may set certain eligibility
requirements.
Often working
couples both qualify for group health insurance through their
employment whereby the spouse is covered by each plan. To
prevent possible abuse, special provisions are required by
law in most states. This is referred to as a Coordination
of Benefits Provision and allows insureds as much coverage
as possible while doing away with over insurance. Receiving
dual benefits constitutes fraud and is punishable by law.
Businesses that
offer group coverage are subject to certain provisions of
the Consolidated Omnibus Budget Reconciliation Act
of 1985 (COBRA). Terminated employees of companies
that regularly employ more than 20 people may be eligible
for extended group health insurance coverage after they leave
their jobs.
COBRA requires
that some group health plans offer a continuation of coverage
at group rates or slightly higher to departing employees
for up to 18 months. For dependents of deceased employees
and in some other special cases, continuation of coverage
can last for up to 36 months.
In most cases,
if an employer discontinues group insurance, employees must
be given the opportunity to convert to individual insurance
without a medical exam.
Self-insurance is
a situation where an employer provides health benefits to
its employees by depositing money in a special self insured
fund which pays for reimbursement of medical expenses from
the fund. This is not a viable option for most employers
which must be large enough to have a base from which to predict
expected expenses.
 
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