Health Insurance Group

What is employer group health insurance coverage?
Group health insurance coverage is a policy that is purchased by an employer and is offered to eligible employees of the company (and often to the employees' family members) as a benefit of working for that company. The majority of Americans have group health insurance coverage through their employer or the employer of a family member.

Are all employer group health insurance policies the same?
Many people don't realize that health insurance is issued differently for different types of employers,and that, because insurance is regulated at the state level of government, the laws regarding health insurance offered by the different types of employers can vary significantly from state to state. Millions of Americans work for small employers, which for health insurance purposes are generally those with 50 employees or less. Millions of other Americans get their health insurance coverage through large employers. Generally, those are business with more than 50 employees. The laws about how coverage can be issued to large groups are different than those for small groups, and the way that premium rates are determined is also different. The requirements for sole proprietors purchasing health insurance coverage also vary on a state-by-state basis.

What are the coverage requirements for small employer plans?
Federal law mandates that no matter what pre-existing health conditions small employer group members may have, no small employer or an individual employee can be turned down by an insurance company for group coverage. This requirement is known in the insurance industry as “guaranteed issue.” In addition, each insurance company must renew its small employer health plan contracts every year, at the employer's discretion, unless there is non-payment of premium, the employer has committed fraud or intentional misrepresentation, or the employer has not complied with the terms of the health insurance contract.

In most states, small employer health insurance companies are allowed to look back at individual group applicants medical histories for pre-existing conditions and may decide not to cover certain conditions for a specified period of time. This is known as an exclusionary, or a pre-existing condition, waiting period. Federal law states that small group health insurance companies may impose no more than a six-month look-back/12-month exclusionary period for pre-existing conditions, but individual states can reduce these time periods. Small group insurance companies are also required to give employees credit for prior coverage against any pre-existing condition waiting period that may be imposed, as long as the employee had other health insurance coverage within 63 days of the application for new coverage.