Chapter 6 Group Health Insurance

A master policy is the correct answer because in group insurance, the policy that is issued to the employer or organization providing the coverage is called a master policy. This policy covers all the individuals who are part of the group and outlines the terms and conditions of the insurance coverage. Each individual within the group receives a certificate of insurance that specifies their coverage under the master policy.

Tim Jnr. should exercise the COBRA option under his father's group. COBRA allows individuals to continue their group health coverage for a limited period of time after leaving the group. Since Tim wants to keep the same coverage until he earns his degree in approximately 24 months, exercising the COBRA option would be the most suitable choice for him. This will ensure that he maintains the same level of coverage and can continue to receive the benefits provided by his father's group health plan.

The purpose of the Coordination of Benefits Provision in Health Care is to determine what is paid by primary and secondary insurance companies, in case of a claim. This provision helps prevent overpayment or duplication of benefits by ensuring that the correct insurance company is responsible for covering the expenses. It helps coordinate the benefits provided by multiple insurance policies to ensure that the insured individual receives the appropriate coverage without any unnecessary financial burden.

A waiting period (probationary period) refers to a specified period of time that an employee must wait before becoming eligible for certain benefits, such as health insurance. In this scenario, Andy's employer informed him that he would not be covered under the employer's group health insurance policy until he had been employed for 30 days. This means that Andy would have to wait for the specified probationary period before being eligible for health insurance coverage.

COBRA is a federal law requiring employers with 20 or more employees to provide the option to continue the employee's existing health coverage for dependents for up to 36 months following qualifying events. This means that if an employee experiences a qualifying event, such as termination of employment or a reduction in work hours, they have the right to continue their health coverage for themselves and their dependents for up to 36 months under COBRA.

The correct answer is "The state in which the policy was delivered." This means that the state where the policy was initially issued and delivered to the insured individuals has jurisdiction over the group policy. This state would be responsible for regulating and enforcing the terms and conditions of the policy, as well as handling any legal matters that may arise.

In a contributory plan, employees are required to contribute a portion of their salary towards the plan. The question asks for the percentage of employees that must participate in this plan. The correct answer is 75%. This means that at least 75% of the employees must actively contribute to the plan in order for it to be considered successful or valid.

In Group Health Insurance, the employer is the policyholder. This means that the employer is the one who holds the insurance policy and is responsible for providing coverage to their employees. The employees themselves do not receive individual policies, but rather are covered under the group policy held by the employer. Additionally, under group insurance, the insurer may have the right to reject certain individuals from coverage based on their eligibility criteria.

A single contract for Group Medical insurance issued by an employer is known as a Master policy. This type of policy covers a group of individuals, such as employees of a company, and provides insurance coverage for medical expenses. The employer is the policyholder and is responsible for administering the policy and paying the premiums. The Master policy outlines the terms and conditions of the insurance coverage for the group, including the benefits, limitations, and exclusions. Individual members of the group receive a Certificate policy that outlines their specific coverage under the Master policy.

The 30-day period in which Henry can enroll for coverage under XX Corporation's group health insurance plan is known as a waiting period. During this time, Henry must wait before he becomes eligible for coverage under the plan. After the waiting period, he will be able to enroll and start receiving the benefits of the insurance plan.

Requiring a minimum percentage of the group to enroll can help protect against adverse selection when underwriting group medical insurance. This is because it ensures that a sufficient number of healthy individuals are included in the group, reducing the risk of only high-risk individuals enrolling and driving up the cost of insurance. By setting a minimum percentage, the insurer can ensure a balanced risk pool and mitigate the potential for adverse selection.

The given correct answer is "Group insurance normally covers occupational injury or disease." This statement is not accurate because group insurance typically does not cover occupational injury or disease. Instead, these types of injuries and illnesses are usually covered by workers' compensation insurance. Group insurance primarily provides coverage for medical expenses, disability, and life insurance for a group of individuals, such as employees of a company.

Guaranteed issue insurance refers to an insurance policy that is issued without requiring the applicant to undergo a medical underwriting process. This means that the insurance company does not consider the applicant's medical history or current health condition when determining eligibility for coverage. Therefore, the correct answer is "Medical underwriting."

A probationary period refers to a specific timeframe before new coverage becomes effective for a specified condition. During this period, the individual may not be eligible for certain benefits or coverage related to the condition in question. This period is often used by insurance companies to assess the individual's health status and determine the level of risk they pose before providing full coverage.

Claims processing being frequent would not render a small employer's health benefit plan nonrenewable. This means that even if there are a high number of claims being processed, it would not affect the ability of the employer to renew the health benefit plan.

The eligibility of members for Group Health insurance is determined by the conditions of employment. This means that individuals become eligible for the insurance based on the requirements and criteria set by their employer. It implies that certain conditions or criteria need to be met, such as being a full-time employee or having a certain length of service, in order to qualify for the insurance coverage.

Multiple Employer Welfare Arrangements (MEWAs) are groups of employers that pool their risks in order to self-insure. MEWAs allow small employers to come together and share the financial risk of providing health insurance to their employees. By pooling their resources, these employers can negotiate better rates and coverage options from insurance providers. MEWAs are regulated by the Department of Labor and must meet certain requirements to ensure the financial stability and protection of the participants.

The correct answer is "The Labor Union must have a minimum of 50 people." This statement is not true because there is no requirement for a minimum number of people in a Labor Union to issue a policy insuring its members. The other statements are true, such as the insurer being able to exclude or limit coverage based on insurability, the premiums being paid from union funds or contributions from insured members, and all members of the union being eligible for insurance.

When group insurance is being replaced, ongoing claims under the former policy must continue under the new policy, overriding any preexisting condition exclusion. This is known as the "No Loss-No Gain" requirement.

Group Insurance does all of the following except providing the employee a 60-day period to convert the group coverage to an individual policy without proof of insurability upon termination of group plan eligibility.