Kizzandria Bayot

Justine Bondad
Avy Mae Orbe
are employer-
sponsored benefits,
other than wages, that
enhances the
economic security of
individuals and
families and are partly
or fully paid for by
employers.
The major difference between
group and individual
insurances

Basic group underwriting

principles

Eligibility requirements for

group insurance benefits
1 Coverage of many persons under one contract.

Group Insurance usually cost less than comparable insurance

2 purchased individually.

3 Individual evidence of insurability is usually not required

4 Experience rating is used in group insurance plans

1 Insurance Incidental to the Group

2 Flow of Persons through the Group

3 Automatic Determination of Benefits

4 Minimum Participation Requirements

5 Efficient Administration
 1 Be a full-time employee

2 Satisfy a probationary period (if any)

3 Apply for insurance during the eligibility period

4 Be actively at work when insurance become effective

NOTE: Eligible groups are determined by insurance company policy and
state law.
 1 Group Life Insurance Coverages

2 Noncontributory and Contributory plans

Characteristics of 3 Probationary period and Eligibility period

Group Life 4 Experience Rating

Insurance 5 Insurance on spouse and dependent children

6 Conversion of term insurance

7 Credit Life Insurance

Group Medical
Expense Insurance
Is an employee benefit that pays the cost of hospital
care, physicians’ and surgeons’ fees, prescription
drugs, and related medical expenses.

Extremely important in providing economic security to

employees and their families.
 Providers of Group Medical Expense
Insurance
• Commercial Insurers
• Blue Cross and Blue Shield (BCBS)
Plans
• Managed Care Organization
• Self-Insured Employer Plans
Health Maintenance Organization (HMOs)
Characteristics Types
1. Organized Healthcare Plan 1. Staff Model
2. Broad, comprehensive medical
services
2. Group Model
3. Restrictions on the choice of 3. Network Model
healthcare providers 4. Individual Practice Association
4. Payment of fixed premiums and (IPA) Plan
cost-sharing provisions
5. Heavy emphasis on controlling
cost
Preferred Provider Organization (PPOs)
• Is a plan that contracts with health care providers to provide certain
medical services to the plan members at discounted fees.
• Difference with HMOs:
• Paid on a fee-for-service basis.
• Freedom to select any hospital, physician, or provider when care is needed.
• The provider absorbs the excess amount when the actual charge exceed the
negotiated fee.
• PPOs doesn’t generally have a gatekeeper physician, who determines
whether medical care or test from a specialist is necessary.
Point-of Service (POS) Plan
• Is a managed care plan that combines the basic characteristics of an
HMO and PPO, but members have the option to select care outside
the network.
• Key Points:
• The POS plan establishes a network of preferred providers
• POS members select a primary care physician to provide for their basic
healthcare needs
• A plan members has the option to elect care within the network or go outside
the network at the time medical care is needed.
Key Features of Medical Expense Insurance
• Comprehensive benefits
• Calendar-year deductible
• Coinsurance requirements
• Copayments
• Out-of-pocket maximum limits
• No cost sharing for certain preventive services
• Noncovered services
Consumer-Directed Health Plans (CDHP)
• A generic term for a plan that combines a high-deductible health plan
with a health savings account (HSA) or health reimbursement
arrangement (HRA).
• These are designed to make employees more sensitive to healthcare
costs, to provide financial incentives to avoid unnecessary care, and
to seek a low-cost providers.
High-Deductible Health Plan
Medical expense plan with an annual deductible that is substantially
higher than deductibles in traditional medical expense plans.

• Health Savings Account (HSA)

• A savings account used in conjunction with a high-deductible health insurance
policy that allows users to save money tax-free against medical expenses.
• Health Reimbursement Arrangement (HRA)
• An employer-funded plan with favorable tax advantages that reimburse
employees for medical expenses not covered by the employer’s standard
insurance plan.
Group Dental Insurance
• Helps pay the cost of normal dental care and also covers damage to
teeth from an accident.
• Principal advantage of helping employees meet the costs of regular
dental care.
• Also encourages insureds to see their dentists on a regular basis, to
prevent or detect dental problems before they become serious.
Group Disability-Income Insurance
• Short-Term Plans
• Generally range from 13 weeks to 52 weeks.
• Benefits are based on earnings and typically replaces 50 to 66.7% of normal
earnings up to some maximum weekly or monthly limit.
• Only covers nonoccupational disability – an accident or sickness must occur
off the job.
• Totally Disable to qualify and usually does not cover partial disability.
• Long-Term Plans
• Typically range from 2 years to age 65 and some extend to age 67.
• Benefits replaces 50 to 80% of gross salary. However, 60% is widely used.
• Typically covers occupational and nonoccupational disability.
Cafeteria Plans
• Allows employees to select those employee benefits that best meet
their specific needs.
• Full Choice Plans (Full Flex Plans)
• Premium Conversion Plans
• Flexible Spending Accounts
Advantages Disadvantages
• Employees can select those • Incur higher initial development
benefits that meets their specific and administrative costs.
needs. • Administrative complexity is
• Employees pays their share of increase.
the cost of benefits with before-
tax dollars.
• Employer can easily control
rising employee benefit costs.