Thu May 23, 2013
Group Health Insurance Plans
10 things you need to know about group health insurance
Group health insurance is an industry term. Group insurance generally has the following statistics and/or requirements
Group medical plans are employer sponsored, meaning that an employer establishes a plan on behalf of the employees. The employer is normally required to pay 50% of the employee premium.
Group medical insurance must meet minimum participation requirements, which are normally 50% of all full time employees - 75% after valid waivers (employees with other valid coverage are counted towards total participation). Plan participants are "guaranteed issue" or guaranteed coverage as long as they had prior coverage with no lapse in coverage in the past 63 days. This can vary by state.
Group medical insurance plans are underwritten based on state mandates. The insurance carrier files the base (best possible) rate with the state Department of Insurance. Once the employee applications are complete there is a maximum rating (extra charge) the insurance company can apply to the base rate, regardless of employee medical conditions or their severity. This applies in most states.
Group medical insurance may be more expensive than individual health insurance coverage, which is not guaranteed issue. Individual coverage is usually less expensive because the insurance company can decline coverage or exclude conditions. This means they take on less risk and therefore premiums can be lower. Group medical insurance does not necessarily mean you are getting a "bulk rate" especially when your "group" is under 5 covered lives. A company with 5 or less healthy employees can usually realize a substantial savings versus a group medical plan.
Multiple plan designs can be offered to employees. Generally the employer decides which plans will be offered and the employee chooses the plan that best suits their needs.
Most companies choose from traditional plans, which have deductibles and co-pays for doctor and prescription expenses. Many companies now choose alternative plans like HSA's and HRA's, which in many cases will lower total costs without lowering benefits.
Waiting periods for employee eligibility in the plan (30,60,90 days, or longer) are determined by the employer.
Companies with 20 or more employees are subject to COBRA, and must extend coverage to terminated employees. The employer is not required to pay any portion of the premium after the employee termination date. To learn more on how you can save, get a group health insurance quote from JLBGHealth.com
These are general rules of group medical insurance and vary by state. Your licensed insurance representative can assist you on state specific requirements.