• Health insurance
• Dental insurance
• Vision insurance
• Life insurance
• Disability insurance
• Long Term Care insurance

Each state separately regulates how group insurance is rated and sold, however the Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most group insurance and pension plans in private industry designed to provide protection for participants in these plans.

What Is ERISA?

ERISA requires plans to provide participants with plan information including important information about plan features and funding; provides fiduciary responsibilities for those who manage and control plan assets; requires plans to establish a grievance and appeals process for participants to get benefits from their plans; and gives participants the right to sue for benefits and breaches of fiduciary duty.

There have been a number of amendments to ERISA, expanding the protections available to health benefit plan participants and beneficiaries. One important amendment, the Omnibus Budget Reconciliation Act (COBRA), provides some workers and their families with the right to continue their health coverage for a limited time after certain events, such as the loss of a job. Another amendment to ERISA is the Health Insurance Portability and Accountability Act (HIPAA) which provides important new protections for working Americans and their families who have preexisting medical conditions or might otherwise suffer discrimination in health coverage based on factors that relate to an individual's health. Other important amendments include the Newborns' and Mothers' Health Protection Act, the Mental Health Parity Act, and the Women's Health and Cancer Rights Act.

How Can My Organization Buy a Group Insurance Plan?

In almost every state, group insurance coverage can be purchased through licensed health insurance salespeople known as agents or brokers. Scholl Associates is licensed in numerous states and as your broker, we sell insurance plans from many companies, and we can help you find the coverage that best suits your organizations needs.

As your broker we also provide service on the policies we have sold, and can help you process claims or solve most any problem that arises regarding your policy. The insurance companies we represent compensate us for our work, so you will not be charged a direct fee for our services.

How Is Group Insurance Different From Individual Insurance?

Group insurance is very different than individual insurance. In group insurance the underwriting is based on the group as a whole and not the individual. The employees or members are neither contracting parties nor policy owners; they are issued certificates of coverage describing the master policy issued to the organization. Laws mandating what types of services must be included in individual policies are often very different from those dictating what must be included in group policies, benefits are generally more extensive than what most people would receive through coverage they have purchased individually.

How Are Premium Rates Determined?

In the vast majority of states, when you apply for group insurance coverage, you are asked to provide health information about the employees or members to be covered. Small group policies (fewer than 50 employees) generally must provide health information on each employee. Large group policies (greater than 50 employees) generally provide health information from employer statements and loss histories. When determining rates, insurance companies use the medical information to determine rates on these applications. Sometimes they will request additional information from an applicant's physician or ask the applicants for clarification.

Are any pre-existing medical conditions covered?

Even though in almost every state an individual insurance company can choose not to offer coverage to a group with serious medical conditions, most organizations don't have perfect medical histories and most still qualify for group coverage. However, there are some individual employees or members who choose not to purchase coverage when they are until they know that they have a medical problem that will require the use of benefits. This is known as “adverse selection,” and it can be a serious problem for insurance companies since their ability to determine and spread risk is so limited.

To help prevent adverse selection, insurance companies are allowed to look back at your medical history for pre-existing conditions and may choose not to cover certain conditions for a specified period of time. This is known as an exclusionary, or pre-existing condition, waiting period. The amount of time an insurance company can look back at your medical history, and the length of time an exclusionary period can last, vary on a state-by-state basis, although HIPAA sets minimum standards. NAHU's Health Care Coverage Options Database will tell you what the requirements are in your state.

Under HIPAA, you can receive credit against a pre-existing condition waiting period if you have had prior health insurance coverage within a specified number of days. The amount of the credit against the waiting period is proportional to the length of the prior coverage.

Can I Still Qualify For Group Insurance If I Have a Very Serious Pre-Existing Medical Condition?

If you are eligible for a group insurance policy, you cannot be turned down for coverage. Depending on the size of the group and which state the group is located, the group can be denied coverage when applying for a new policy. But, once the group policy has been issued, individual employees or members cannot be denied coverage.

Since Each State Sets Its Own Requirements For Group Insurance Policies,
How Can I Find Out What The Requirements Are In My State?

To find out about each state's specific requirements regarding group health insurance policies, please see NAHU's Health Care Coverage Options Database. The database also contains contact information for the state regulators of individual health insurance policies to use if you have questions or concerns.