Group Health Insurance
Group Mechanics
Group health insurance covers a group under a master policy issued to the group sponsor (typically an employer), with certificates of coverage issued to members. Key concepts: eligibility (who may enroll), open enrollment, actively at work requirements, waiting periods, and late enrollees. Know contributory vs. noncontributory plans: in a contributory plan, a minimum percentage of eligible employees must participate; in a noncontributory plan, the employer pays the full premium and participation is typically required.
Understand coordination of benefits (COB) to prevent double payment, preexisting condition limitations under group rules, and COBRA continuation rights (qualifying events, election period, and duration). Know conversion rights (individual policy after group coverage ends) and portability.
Traps in Questions
- COB order. The plan covering the employee as an employee generally pays before the plan covering the person as a dependent.
- COBRA notice periods. The employer must notify the plan administrator within a specified time; the individual has an election window; questions often test the sequence, not just the duration.
- Active-at-work requirement. Coverage may not begin until the employee is physically at work.
- Conversion vs. continuation. Conversion creates an individual policy; COBRA continues the group coverage temporarily.
Rule of Thumb
For COB, ask in what capacity is this person covered? The plan where the person is the primary insured pays first; the plan where the person is a dependent pays second.