Group Health Insurance
Structure
A master policy is issued to the sponsor (employer, union, association); participants receive certificates of coverage. Key advantages: lower cost per person, no individual underwriting, and broad eligibility. Underwriting focuses on the group: size, industry, prior claims (experience rating), or community rating for small groups.
Eligibility rules
Employees must satisfy eligibility (hours, waiting period) and be actively at work for coverage to begin. In contributory plans (employee pays part), a minimum participation percentage - usually 75% - is required. In noncontributory plans (employer pays all), 100% participation is required. This is one of the most frequently tested distinctions.
Continuation and conversion
COBRA applies to employers with 20+ employees: 18 months for termination/reduction in hours, 29 months with disability extension, 36 months for dependents in certain events. Election within 60 days, payment within 45 days, premium up to 102%. Conversion allows a departing insured to buy an individual policy without evidence of insurability, usually within 31 days. DC has its own continuation requirements for smaller employers, and state continuation rules interact with COBRA.
Coordination with law
ACA: no pre-existing condition exclusions, dependent coverage to 26, no waiting periods over 90 days, guaranteed issue in the small-group market. HIPAA provides portability and special enrollment on marriage, birth, or loss of other coverage. Self-funded plans are ERISA-governed and usually state-mandate-exempt; a TPA or ASO arrangement administers them.
Traps
- Group life and health coverage generally ends when employment ends (with continuation or conversion rights).
- Coordination of benefits determines primary/secondary payer; the active employee's plan is generally primary over a spouse's.
- Do not confuse COBRA continuation (same group plan) with conversion (individual policy).