Group Health Insurance
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 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.
- 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.
- 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.
- 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.
- 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).
Popular Insurance Terms
Coverage on jewelry and precious stones on an all risks basis at any location subject to exclusions of wear and tear, war, and nuclear disaster. Each item must be specifically listed in the ...
Individual permitted to enter property with the permission of the owner or the person who controls the property. There is no mutual profit motive; the licensee comes onto the property for ...
Trust that is established by people still alive. ...
Transaction by a tax-exempt organization with a person from inside the organization (disqualified person) that provides an economic benefit to that person that is in excess of the value of ...
Privately formed insurance company whose objective is to make a profit. ...
Coverage for ships in port for a lengthy stay and/or those that are under repair. Insures on an all risks basis to include the exposures associated with the ship moving from one dock to ...
Payments awarded by a court in a liability suit. Money damages can be broken down into compensatory and punitive. Compensatory damages reimburse a plaintiff for expenses incurred for such ...
Society dedicated to the advancement of professional standards of risk management. Its membership is composed of risk and insurance managers of business organizations, public organizations, ...
Denial of coverage for damage, in inland marine insurance, stemming from routine use of the property. Property can be expected to deteriorate somewhat over time from normal use. This is not ...

Have a question or comment?
We're here to help.