11.5 Group Health Insurance
Group health insurance has many similarities to group life plans. Eligibility qualifications for participants (either contributory or noncontributory) present lower costs than individual plans and contain predetermined benefits; underwriting practices, conversion privileges and preexisting conditions provisions are commonly standard. As with group life plans, group health plan contracts are between the employer and the insurer through a master policy. Individual insureds receive a certificate of insurance coverage and a benefits package. Unlike some other states, Florida does not set a restriction on how many participants it takes to provide coverage under a group policy.
Under Florida law, insurers of large groups (at least 51 persons) must accept the entire group. If they believe an individual in the group poses too great a risk to insure the group, they can reject the entire group Florida law does not permit individual risk "carve outs" in such cases.
What are the advantages of a contributory group health insurance plan?
One advantage of a contributory plan is that greater benefits can be provided than if only the employer portion was used for funding. Another advantage is that employees take a greater interest in the plan, since they share in its cost.
The vast majority of insureds rely on their employer to provide health insurance for themselves and their families. In keeping with this theme, in this lesson we will refer to the employer as the "group." Individual health policies can be extremely expensive and group health coverage is much more affordable. Group health insurance typically gives insureds higher maximum benefit limits as well as lower deductibles.
Insurable groups (natural groups) basically fall into the same categories as group life participants.
- Single-Employer Groups
- Multiple-Employer Groups
- Labor Unions
- Trade Associations
- Creditor/Debtor Groups
- Fraternal Organizations
Group health plans typically impose certain eligibility restrictions such as the proposed insured must be an employee of the association for a designated period of time (usually 30 to 90 days) and must be considered a full-time employee.
