Chapter 28 - Group Health Policies Flashcards
Group Health and Provisions
Can you have group and Medicare coverage? Yes, government policies are always secondary.
A Group Health Insurer can drop a group if the employer fails to comply with the group rules and regulations BUT NOT because of excessive claims.
The ACA does not require the employers to offer health coverage for dependents.
It’s illegal for an employer to stop providing coverage for employees at or over age 65.
The waiting period can’t be longer than 90 days, a military person returning to work does not have a waiting period.
When an employer switches carriers mid year, the NO LOSS NO GAIN provision protects the employees already paid deductibles.
Required Provisions
-information provided in the application is considered representation and not a warranty.
-misstatement of age - (gender only in life) - benefits are adjusted if the insurer later finds out that the age is different in the application.
-evidence of insurability - the insured does not have to prove insurability unless they deny benefits up front and later ask to join.
-incontestable period - in force for 2 years and then nothing after that. Individual plans open fraud up to always being contestable.
- Grace period - 31 days, not based on premium mode like individual.
Designation (Change) Change of Beneficiary - the member insured, not the owner (company) of the policy, that chooses the beneficiary.
Optional Provisions
-Notice of Claims - insured must provide the company of a loss within 20 days.
-Claims Forms - company must provide claim forms to insured in 15 days.
-Proof of Loss - insured must provide the company with written proof of loss in 90 days if they did provide a claim form.
- Time of Payment of Claims - company must pay the claim within 60 days.
-Physical Exam and Autopsy - company can require a reasonable number of medical exams and 1 autopsy.
-Legal Action - insured must wait 60 days to sue and must initiate within 3 years.
Coordination of Benefits
Coordination of Benefits (COB) clause - If a family has two group policies, each insured family member is deemed to have only 1 primary policy. The other spouses would be called secondary. The secondary will cover anything the primary didn’t.
*** who coverers the kids. The parent whose birthday comes first in the calendar year becomes the primary policy for the children.
COBRA
Consolidated Omnibus Budget Reconciliation Act - COBRA. - deals with continuation and conversion of a group policy. It guarantees that people can continue coverage until they get a new policy. It’s not a new policy but shifts the cost to the insured NOT the employer.
This is for those who quite, get fired, laid off, and it covers their dependents and for who worked there for at least 3 months. Cobra privileges are NOT available to those of GROSS MISCONDUCT. Sleeping on the job and getting fired you would be covered but if you were stealing from the employer and get fired, Cobra would not cover.
Cobra required employers with 20 of more employees to provide cobra and their dependents. The employers may charge the insured up to 102% of the total costs of the coverage. The extra 2% is for administrative costs. In some cases its cheaper to just get a individual policy.
You have 60 days (ELECTION PERIOD) as the insured or beneficiary to choose to purchase coverage. Typically people wait until day 59 to see if anything happens until then medically.
You have 31 days to convert from a group to an individual policy.
Timetable of coverage
18 months for a terminated employee
29 months for a disabled employee
36 months for dependents of a divorced or deceased worker.
If the employer drops group coverage, there is NO Cobra continuation or conversion.
HIPPA and Preexisting conditions
HIPPA limits pre-existing conditions. It defines it as anything that received treatment in the last 6 months. It then requires the group insurer to cover any such condition for 12 months after joining the group and 18 months if the applicant initially waives coverage but later wants to enroll.
It also states that if the insured has coverage for 12 months with no gap greater than 63 days, the new group must cover.
