This chapter’s objectives are to: Meaning of employee benefits, fundamentals of group insurance, group life insurance plans, group medical expense insurance, traditional indemnity plans, managed care plans, consumer-directed health plans, recent developments in employer-sponsored health plans, group medical expense contractual provisions, group dental insurance, group disability-income insurance, cafeteria plans. | Employee Benefits: Group Life and Health Insurance Lecture No. 27 1 Objectives Meaning of Employee Benefits Fundamentals of Group Insurance Group Life Insurance Plans Group Medical Expense Insurance Traditional Indemnity Plans Managed Care Plans Consumer-directed Health Plans Recent Developments in Employer-Sponsored Health Plans Group Medical Expense Contractual Provisions Group Dental Insurance Group Disability-Income Insurance Cafeteria Plans 2 Meaning of Employee Benefits Employee benefits are employer-sponsored benefits, other than wages, that are partly or fully paid by employers, which enhance the financial security of individuals and families These benefits include: Group life, medical and dental insurance Paid holidays, vacations, medical leave Educational assistance, employee discounts Employer contributions to Social Security and Medicare 3 Fundamentals of Group Insurance Group insurance differs from individual insurance in several ways: Many people are covered under one . | Employee Benefits: Group Life and Health Insurance Lecture No. 27 1 Objectives Meaning of Employee Benefits Fundamentals of Group Insurance Group Life Insurance Plans Group Medical Expense Insurance Traditional Indemnity Plans Managed Care Plans Consumer-directed Health Plans Recent Developments in Employer-Sponsored Health Plans Group Medical Expense Contractual Provisions Group Dental Insurance Group Disability-Income Insurance Cafeteria Plans 2 Meaning of Employee Benefits Employee benefits are employer-sponsored benefits, other than wages, that are partly or fully paid by employers, which enhance the financial security of individuals and families These benefits include: Group life, medical and dental insurance Paid holidays, vacations, medical leave Educational assistance, employee discounts Employer contributions to Social Security and Medicare 3 Fundamentals of Group Insurance Group insurance differs from individual insurance in several ways: Many people are covered under one contract A master contract is formed between the group and insurer Coverage costs less to the individual than comparable insurance purchased individually Individual evidence of insurability is usually not required Experience rating is used 4 Transparency Master Group Insurance Group insurers observe certain underwriting principles: The group should not be formed for the sole purpose of obtaining insurance There should be a flow of persons through the group Benefits should be automatically determined by a formula This is to reduce adverse selection against the insurer A minimum percentage of employees must participate Individual members should not pay the entire cost The plan should be easy to administer 5 Transparency Master Group Insurance Eligibility for group status depends on company policy and state law Usually a minimum size is required Employees must meet certain participation requirements: Be a full time employee Satisfy a probationary period Apply for coverage during the
