Group Life and Group Health Insurance
How group coverage works
A single master contract is issued to the employer, union or association; members receive certificates as evidence of coverage. The employer is the policyholder, the employee is the certificate holder, and the employer usually administers the plan. Group underwriting looks at the characteristics of the whole group - size, industry, age and sex mix, persistency - rather than at individual health.
Eligibility rules include the actively at work provision, probationary periods and contributory versus noncontributory enrollment. Contributory plans typically require at least 75% participation; noncontributory plans require 100%. Coverage amounts are commonly flat or salary multiples, often with a maximum that requires evidence of insurability.
Group life provisions
Conversion privilege - convert to an individual permanent policy without evidence of insurability, generally within 31 days of losing eligibility. Portability lets the member continue group term coverage at their own cost. Also know accidental death and dismemberment, group universal life and group variable life.
Group health
Study open enrollment, late entrant rules, and COBRA: employers with 20 or more employees must offer continuation, generally 18 months after termination or a reduction in hours, 29 months if the qualified beneficiary is disabled, and 36 months for dependents and surviving spouses, with a 60-day election window. Also know HIPAA portability and privacy, FMLA, and the distinction between fully insured and self-funded (ERISA) plans.
Trap: the 31-day conversion window is a hard deadline. Miss it and the member must qualify medically. Also, the master contract governs, not the certificate.