Group Health Insurance Flashcards
Unbundled Health Plan
Employer policy where employees can choose what benefits they want and what additional coverage they want. Employer pays for a baseline amount of coverage and then the employee pays for additional coverage.
Creditor Group Policy
Group policy taken out by a loaner/creditor where the policy pays for accidental death or dismemberment for their debtor so that if they die, they can recover their loan via the policy benefit.
MET
Multiple Employer Trust. Group policies found in small business market where a small business can enter into a group (MET) with other similar types of businesses. This makes it easier for small groups to obtain coverage since they may have trouble getting access to health insurance. Insurer decides the terms of the MET (ex. nature and class).
Conformity with State Statues Provision
Optional Provision that removes any conflict in a policy’s language with state laws. It amends policy language so that it complies with state laws even if issued incorrectly.
Experience Rating
Ratings method used by insurance for the purposes of underwriting group coverage. Involves looking at loss experience of a group, number of claims, amount paid in claims, etc.
Pure Community Rating vs. Modified Community Rating
Under pure community rating system, insureds in a group health plan are all charged the same rate. Only variance would be for geographic areas and size of family. Under modified pure community rating, rate differences are allowed based on age and gender. Neither allows insurers to base rates on health status.
Legal Actions Provision
Sets boundaries for when legal action can be taken against an insurer. Must not begin for at least 60 days after proof of loss is filed, and can be filed within 3 years.
Rating Bands
Allow insurers to base coverage premiums on rates like age, industry, geography, gender, size, etc.
Persistency factors
Refers to whether group members will remain active or drop coverage and is a determining factor in underwriting decisions. How stable is the workforce? Does employer or employee pay for coverage? Employer paying is more stable because plan members are less likely to drop coverage.
