Group Health Insurance Questions

Group Health Insurance FAQ’s

To help our readers understand the different facets of group health insurance, we’ve compiled a list of Group Health Insurance Frequently Asked Questions. We hope that these group health insurance FAQ’s help our readers sort out some of the common misunderstandings about group health insurance. To that end, here are some group health insurance FAQ’s:

How many hours a week does an employee have to work to be considered a full time employee?

Eligibility for a group health plan requires active, full-time employment of 20-30 hours per week or more. Compensation received for work performed for an employer must be subject to withholding on a W-2 tax form.

What happens to the group health insurance coverage when an employee terminates or retires?

COBRA (the Consolidated Omnibus Budget Reconciliation Act) legislation allows the coverage to continue for a period if coverage is lost due to the loss of a job, a reduction in the amount of hours worked, death, divorce, new employment or other life events. COBRA allows former employees to continue their coverage, but the insured must pay for the total premium (employee and employer portion) and a 2% administrative fee for the company to manage the policy.

If I have a preexisting medical condition, can I join a group health insurance plan?

While there may be states in which preexisting medical conditions are not covered under a new group health policy, in New York, if a person moves from one group health plan to another, preexisting conditions are covered. If there is no continuous coverage, an exclusion applies for a 12-month period, after which time coverage is allowed.

What are the advantages of a group health insurance plan over an individual health insurance plan?

Since group health insurance plans distribute the risk over a larger group of people, the premiums are usually much lower than individual health insurance premiums. Plus, since the risks spread over a group of people, a group health insurance plan can also offer more services in the coverage than an individual health policy. It should be noted that individual health plans are very limited in the State of New York.

What is the difference between primary and secondary coverage?

This is a common issue when two people in a family, usually the husband and wife, both have coverage provided by a group health insurance plan. Insurance companies will often establish primary and secondary coverage to save money and avoid dual coverage and overpayment for any procedures covered under their plans. Primary coverage is usually determined by the length of employment; benefits are paid for any procedure outlined in the policy up to the limit that the plan allows. Secondary coverage usually accounts for coverage as a dependent on another health plan and covers the costs of medical procedures if the costs exceed the limit outlined in the primary plan.