Group Health Insurance

Creditor

a lender of funds

Debtor

a borrower of funds

Extension of Benefits

a provision that allows coverage to continue beyond the policy's expiration date for employees who are not actively at work due to disability or who have dependents hospitalized on that date (coverage continues only until the employee returns to work or the dependent leaves the hospital)

HIPAA

The Health Insurance Portability and Accountability Act is a federal law that protects health information

Persistency

the tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer

Self-funded programs

a noninsured plan that uses a trust fund to pay for employees' health care expenses directly

Underwriting

risk selection and classification process

Master policy

issued to the group sponsor

Certificates of insurance

evidence of coverage for the insureds

Types of Eligible Groups

Employer sponsored - individual or Multiple Employer Trust (MET)

Association - alumni or professional

COBRA Length of coverage

18 months – after qualifying event

36 months – for dependents after events such as death of the employee, divorce or legal separation

COBRA Qualifying Events

Voluntary termination of employment

Termination of employment for reasons other than gross misconduct (e.g. company downsizing)

Employment status change: from full time to part time

What types of groups are eligible for group health insurance?

Employer-sponsored and association-sponsored groups

Does group health insurance require medical examinations?

No, the underwriter evaluates the group as a whole, rather than each individual member

Who are the parties in a group health contract?

The employer and the insurer

How do insurers determine the cost for a group health policy?

The main variables are the ratio of men and women in the group, and the average age of the group

According to the Coordination of Benefits provision, if both parents have coverage for a child from their employers' policies, which policy will pay first?

The order of payment will be determined by the birthday rule: the coverage of the parent whose birthday is earlier in the year will be considered primary

How many members must an association have to qualify for group insurance?

100 members

What do individual insureds receive as proof of their group health coverage?

Certificate of Insurance

What is a probationary period in group health insurance?

The period of time that must lapse before an employee is eligible for group health coverage

In health insurance, when would an excess plan pay benefits?

After the primary plan has paid its full promised benefit, the excess plan will pay the balance

What is a birthday rule in a coordination of benefits provision?

The coverage of the parent whose birthday is earlier in the year is considered primary

If a group health policy covers individuals that reside in more than one state, which state has jurisdiction over the group policy?

The state in which the policy was delivered

In group insurance, who is issued a certificate of insurance?

Individual insured

If the insureds share in the cost of health insurance premiums with the employer, this would be known as what type of group health plan?

Contributory

What is the purpose of COBRA?

To allow continuation of health insurance coverage for terminated employees

In group insurance, what is the name of the policy?

Master policy

How is the eligibility of members for group health insurance determined?

By conditions of employment

Can a group that is formed for the sole purpose of obtaining group insurance qualify for group coverage?

No, the group must be formed for a purpose other than obtaining group insurance

Which of the following statements concerning group health insurance is CORRECT?

The employer is the policyholder

Which of the following is NOT the purpose of HIPAA?

To provide immediate coverage to new employees who had been previously covered for 18 months

When employees are actively at work on the date coverage can be transferred to another insurance carrier, what happens to coinsurance and deductibles?

They carry over from the old plan to the new plan

In order to qualify for group coverage in this state, associations must insure

At least 25 members

How long is the open-enrollment period under an employer group health insurance plan?

30 days

Which of the following factors would be an underwriting consideration for a small employer carrier?

Percentage of participation

In group health plans, to be considered a full-time employee, the employee must work at least how many hours per week?

30

In a group policy, the contract is between

The employer and the insurance company

Why do group health providers usually require a certain amount of participation in the plan by eligible employees?

To guard against adverse selection and reduce cost

In order to maintain coverage under COBRA, how soon from termination of employment must an employee exercise extension of benefits?

60 days

If the husband files a claim and both spouses have coverage through their employers, what insurance is primary?

The insurance through his company is primary

What is the benefit of experience rating?

It allows employers with low claims experience to get lower premiums

Accountable health plans cannot impose pre-existing condition exclusions on children adopted

Before age 18