Group Benefits
What defines a "group" plan?
Many health insurance carriers offer major medical coverage on a group basis. This means that the company will cover a group of individuals (usually an employment-based group). This is often referred to as "group benefits" or just "benefits". The basic difference between private health insurance and group benefits is twofold:
1) The proposed insured group offers their entire group to a health carrier as one single unit. The carrier can then decide to accept or reject the entire group. They cannot single out any individual and deny coverage based on health issues. However, it is very rare for a company to reject a group for coverage because often they can ask for very high premiums if there are abundant health issues. Because of this, group health benefits are often referred to as "Guaranteed Issue". Currently, individual plan applicants can be singled out for denial of insurance due to health reasons.
2) A covered person under a group health insurance plan does not own the plan. The employer is the policy owner and is issued a master policy. Each individual insured on the policy receives a certificate of insurance and an outline of benefits. Keep in mind however, that COBRA will allow a terminated group member to maintain their group coverage, but often at a higher cost than the group member is used to. Individual policyholders actually own their own insurance, therefore keeping it separate from any employment.
Maternity Coverage in Group Insurance
While individual health insurance plans rarely cover maternity-related expenses, group health benefit plans must provide maternity benefits. This is the result of a 1979 amendment to the Civil rights Act, which requires plans covering 15 or more people to treat pregnancy-related claims no differently than any other allowable medical expense. This is a large relief to group insureds because individual maternity riders can sometimes double or triple the cost of an individual health insurance plan.
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