A Guide to Group Health Insurance

Health insurance coverage is one of the most important group insurances that an employer should provide his employees with. It also serves valuable purposes for the employee.

By Christiene [website] from Raleigh, NC on January 30, 2006
Category: Group Health Insurance Guides

HEALTH INSURANCE GUIDES

FOR GROUP PLANS

Health insurance coverage is one of the most important group insurances that an employer should provide his employees with. It will save him from needless worry that accompanies every sickness or accident suffered by his employees, while in the performance of their duties. Imagine the cost of hospitalization, medicines, laboratory and surgical fees it would entail.

Enrolling in a group plan will serve two valuable purposes: on one hand, it will protect the company’s interests in the case of any unforeseen event. On the other, it will build up an employee’s morale, knowing that the company has his best interest at heart. It is a win-win situation, indeed.

Group Health Insurance is availed of through employers, labor unions and other professional associations. If it is company-sponsored, payment of premiums is usually paid for by the employer. In other cases, some of the costs may be borne by the employee. Premiums are the scheduled investment-portion of the plan, as used interchangeably with the words, “payment” or “contribution.”

Premiums are less expensive compared with individually-taken health insurance policy. An often-quoted economic parlance suggests that it is always “cheaper to buy in bulk.”

Enrollment is easy, too. On the first year, member-applicant will not be asked to show proof of insurability.

Most group health insurance coverages are offered to companies with a sizeable number of employees (at least 20). A uniform set of health-care benefits are prescribed for both young and older employees.

Since this is a group plan, a master policy is issued where all the benefits, provisions and exclusions are stipulated. The contracting parties are your company and the insurer (insurance company). It is advisable to get a copy of the master policy for your reference.

Responsible agents and insurance companies often welcome your desire to understand and know your benefits. They will not hide anything from you. Though a group contract, it is still your interest they try to protect.

WHAT HAPPENS TO YOUR INSURANCE WHEN YOU RESIGN OR LOSE YOUR JOB?

In the event of resignation or severance from your job, what are the possible remedies available to you?

Under a US Federal Law of 1985, known as the Consolidated Omnibus Budget Reconciliation Act, aptly known as C.O.B.R.A., and available to all US employees in companies employing more than 20, an assurance of continued health insurance coverage up to 18 months from the time of severance is assured; this same law applies to divorce which covers the worker’s family up to three years. Continuance of your coverage under this option should be communicated to your employer. You are also obliged to pay all your premiums.

In all other instances, you may either convert your policy into an individual coverage. The advantage is you will no longer be required to undergo a medical exam, although the pre-existing clause of your policy may still apply.

The other option is to purchase a short-term policy which covers you within the period you may still be looking for a new job. You may also avail of group health insurance coverage through membership in a professional association in your area.

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