Group Health, Medicare and Other Health Coverages
Group Health
How group underwriting works
Group coverage is underwritten on the characteristics of the group, not the individual. Insurers look at group size, industry, prior claims experience, and participation rules. A typical requirement is that a minimum percentage of eligible employees participate and that the employer contribute toward the premium. Employees usually must satisfy a probationary period (waiting period before eligibility) and be actively at work on the effective date. Open enrollment allows eligible employees to join without evidence of insurability; a late entrant may face a waiting period for pre-existing conditions where permitted.
Cost and plan design
Group health may be experience rated (premium based on the group's own claims) or community rated. Funding arrangements include fully insured, self-funded, and multiple employer trusts. Section 125 cafeteria plans let employees pay premiums with pre-tax dollars; HSAs, HRAs, and FSAs are common companions. Under the ACA, small-group plans face guaranteed issue, community rating, and essential health benefit requirements.
Continuation and conversion
COBRA requires employers with 20 or more employees to offer continuation: 18 months generally, 29 months for Social Security disability, and 36 months for dependents after death, divorce, or Medicare eligibility. Conversion allows an insured to convert group coverage to an individual policy, usually without evidence of insurability but at individual rates.
Group life and disability
Group term life is typically renewable term with a conversion privilege; the first $50,000 of employer-provided coverage is excluded from the employee's income, and amounts above that are imputed income. Group disability follows the same tax logic: employer-paid premiums make benefits taxable.
Traps: confusing conversion (individual policy) with continuation (temporary same group plan); forgetting that COBRA applies to private employers with 20+ employees; and assuming group underwriting evaluates each employee's health.
Rule of thumb: group coverage prices the pool, individual coverage prices the person.
Medicare and Other Health Coverages
The four parts
Part A (hospital insurance) covers inpatient hospital stays, skilled nursing facility care after a qualifying hospital stay, hospice, and some home health. It is premium free for most people with sufficient work history and carries a deductible per benefit period, not per year. Part B (medical insurance) covers physician services, outpatient care, durable medical equipment, and preventive services; it charges a monthly premium, an annual deductible, and generally 20% coinsurance with no out-of-pocket maximum. Part C (Medicare Advantage) replaces original Medicare with a private plan network that must provide at least the same benefits and often adds drug coverage. Part D covers prescription drugs through private plans.
Enrollment and supplements
Initial enrollment is a 7-month window around age 65 (three months before, the birthday month, three months after). The annual election period runs October 15–December 7. Late Part B/D enrollment can trigger lifelong penalties. Medigap policies are standardized (Plans A, B, C, D, F, G, K, L, M, N) and pay Medicare's cost-sharing; Plans C and F are unavailable to those newly eligible after January 1, 2020. A Medigap policy cannot be used with Medicare Advantage, and Medigap does not cover prescription drugs.
Other coverages
Medicaid is income-based and covers long-term custodial care that Medicare does not. Other programs include SCHIP, TRICARE, and VA benefits. Workers' compensation covers work-related injury regardless of fault and is not a health insurance product. Medicare generally pays secondary to group health coverage for active employees in larger groups.
Traps: Medicare does not pay for custodial long-term care; Part B has no out-of-pocket maximum; and a Medigap plan cannot be paired with a Medicare Advantage plan.
Rule of thumb: A = hospital, B = doctor, C = private all-in-one, D = drugs; Medigap fills gaps in original Medicare only.