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
Restriction on the benefit that owners and other highly compensated individuals may receive from a qualified pension or other employee benefits. The U.S. Tax Code requires that benefits ...
Cost of an annuity. Annuities are often paid for in a lump sum rather than annual or other periodic payments. This sum, which guarantees an income, usually for life, is called the purchase ...
Interest of a beneficiary in the proceeds of a survivorship annuity. ...
Act first passed in 1962 that permits the self-employed individual to establish his or her own retirement plan. This individual can make nondeductible voluntary contributions and ...
Increases (decreases) in capital assets (such as stocks and bonds) between the date of purchase and the date of sale. ...
Act by a company that authorizes an agent to act on its behalf. ...
Amount of insurance coverage that an insurance company is willing to write on a given category of business. ...
Coverage giving income benefits to surviving family member (s) if one member should die. These include the family income policy, family income rider, family maintenance policy, and the ...
Contract providing whole life insurance on the father and term insurance on the mother and all children, including newborns after reaching a stated age, usually 15 days. Children, upon ...

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