Group Health Insurance

Group Health Insurance involves coverage underwritten on members of a natural group, such as employees of a particular business, union, association, or employer group. Each employee is entitled to benefits for hospital room and board, surgeon and physician fees, and miscellaneous medical expenses. There is a deductible and a coinsurance requirement each employee must pay.

Characteristics of group health insurance include:

  • True Group Plan
  • Schedule of Benefits
  • Eligible Expenses
  • Exclusions from Provisions of Medical bBenefits
  • Coordination of Benefits

True Group Plan – one in which all employees must be accepted for coverage regardless of physical condition. Usually an employee must apply and pay the first premium within the first 30 days of employment or he or she forfeits the right to automatic coverage. Individuals are covered under a master contract, each receiving a certificate denoting coverage.

Schedule of Benefits – describes what the insured and their covered dependents are entitled to in the event of disease, illness, or injury. After the insured or the covered dependent has satisfied the deductible, the insurance company pays a given percentage until a total sum, usually $5,000, is reached for the calendar year. After the total sum has been reached, the insurance company pays 100 percent of the total eligible expenses until the end of the calendar year, subject to a maximum lifetime amount.

Eligible Expenses – include hospital bills, surgery, doctor’s services, private nursing, medicines, and X-rays. Payment allowed for these and other expenses are spelled out in the policy.

Exclusions from Provisions of Medical Benefits – many exclusions occur in group health plans, including: benefits under Workers Compensation; certain mouth conditions; convalescent or rest cures; expenses incurred by a member of a health maintenance organization or other prepaid medical plan; and expenses associated with intentional self-inflicted injuries or attempt at suicide.

Coordination of Benefits – when there are two or more group health insurance plans covering the insured, one plan becomes the Primary Plan and the other becomes the Secondary Plan. The Primary Plan is required to pay benefits due the insured and/or covered dependents before any other plan pays benefits. When a claim is made, the primary plan must pay the claim without regard to the benefits provided under any other plan. The secondary plan pays the difference between the total claim amount and the amount that the primary plan has paid, up to total allowable expenses.