Definition of "Group health insurance"

Amy  Medeiros real estate agent

Written by

Amy Medeiroselite badge icon

Blackstone/Ocean Properties

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:

  1. TRUE GROUP PLAN one in which all employees must be accepted for coverage regardless of physical condition. (For example, coverage cannot be denied because of a pre-existing condition such as cancer.) 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 (a form of GUARANTEED INSURABILITY). Individuals are covered under a MASTER CONTRACT, each receiving a certificate denoting coverage.
  2. Schedule of Benefits describes what the insured and his or her covered dependent (s) is entitled to in the event of disease, illness,or injury. After the insured or the covered dependent has satisfied the DEDUCTIBLE (defined as the first portion of all of the eligible expenses that occur during a calendar year of coverage), the insurance company pays a given percentage (usually 80%) until a total sum (stop loss), usually $5000, is reached for the calendar year. After the total sum has been reached, the insurance company pays100% of the total eligible expenses until the end of the calendar year subject to a maximum lifetime amount.
  3. 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. For example, the hospital's daily charge for room and board is subject to a specified maximum.
  4. 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 (HMO) or other prepaid medical plan; expenses associated with intentional self-inflicted injuries or attempt at suicide.
  5. 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 plan (s) becomes the Secondary Plan (s).
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.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Intent to defraud. An insured is required to answer truthfully all questions on the application. The insurance company can void a contract if it would not have issued a policy had it known ...

Liability reserve, establishment required by the national association of insurance commissioners (naic), the purpose of which is to accumulate realized capital gains and losses resulting ...

Life insurance policy in which the cash value and in some circumstances the death benefit will vary according to the investment performance of an underlying portfolio usually comprised of ...

Same as term Commutation Right: right of a beneficiary of a life insurance policy to exchange the future installments due that beneficiary for a lump sum distribution. ...

Tenant's modifications of leased space to fit his particular needs. Up to 10% of contents coverage inside the structure may be applied to insure against damage or destruction of ...

Same as term Date of Issue: date when an insurance company issues a policy. This date may be different from the date the insurance becomes effective. ...

Arrangement between the seller and the buyer in which the buyer has the right to buy (call option) or sell (put option) a security at some time in the future at a price stipulated at ...

Legal instrument posted by a contractor or craftsman to guarantee that completed work is free of flaws and will perform its intended function for a specified period of time. ...

Method of investing that staggers the maturities of a group of bonds. As a bond matures, the investor can reinvest the proceeds in either short- or long-term bonds depending on the interest ...

Popular Insurance Questions