Group Health Plans and Employee Benefit Design
Group mechanics
Group coverage rests on a master contract between insurer and employer, with certificates issued to participants. Underwriting emphasizes group characteristics, not individual health: participation percentages, eligibility classes, and an actively-at-work requirement. Distinguish eligibility waiting periods from plan waiting periods for specific benefits, and experience rating (large groups) from pooled or community rating (small groups).
Plan design and accounts
Design choices include indemnity, PPO, HMO, and consumer-directed arrangements pairing a high-deductible health plan with an HSA. Understand the Section 125 cafeteria plan framework that permits pre-tax employee contributions and the tax treatment of FSAs, HSAs, and HRAs, plus nondiscrimination testing (Section 125, Section 105(h)).
Statutory overlays
ERISA governs reporting and disclosure (SPD, Form 5500) and fiduciary duties. COBRA continuation applies to employers with 20 or more employees, with a 60-day election window, a 45-day payment window, and maximum continuation of 18 months for termination or reduced hours, 29 months for disability extension, and 36 months for dependents in certain events. HIPAA special enrollment rights (marriage, birth, loss of other coverage) generally require a 30- or 60-day request window, and parity rules govern mental health benefits.
Traps
Questions misapply the 20-employee COBRA threshold, confuse the 18-month and 36-month periods, or assume an employee may drop coverage mid-year without a qualifying event.
Worked example
Employee terminates in March after 14 months of coverage. COBRA runs 18 months from the qualifying event date, not from the plan year or from the date the employer notifies the carrier.