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

Bonds that are less than investment grade plus the bonds that are in or approaching default, which comprise part of the insurance company's investment bond portfolio. ...

Difference in the amount of losses between the beginning and end of a time period. ...

Action by the owner of a cash value policy to relinquish it for its cash surrender value. Since the depression of the 1930s, companies have reserved the right to delay payment of a cash ...

Person insured under a blue CROSS hospitalization or blue shield medical health insurance plan. ...

Report that an insurance company must file annually with the State Insurance Commissioner in each state in which it does business. The statement shows the current status of reserves, ...

Fixed or stated amount of interest paid by a security expressed as a percent of the par value of the security. The longer the length of time until maturity, the higher the coupon rate to ...

Retirement plan under which a discrete increment of periodic retirement income is credited to an employee for each year of service with an employer. This increment is either a flat dollar ...

Specific powers that a prospective insured believes the insurance company has granted to its agent. For example, if the insurance company has furnished the agent a rate book, application ...

Type of guaranteed investments contract in which the interest credited is adjusted on a periodic basis to reflect the investment earnings of the underlying assets of the contract. ...

Popular Insurance Questions