100 marks insurance bbi

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GROUP INSURANCEINTRODUTION Group insurance is an insurance that covers a group of people, usually who are the members of societies, employees of a common employer, or professionals in a common group. Group coverage can help reduce the problem of adverse selection by creating a pool of people eligible to purchase insurance who belong to the group for reasons other than for the purposes of obtaining insurance. In other words, people belong to the group not because they possess some high-risk factor which makes them more apt to purchase insurance (thus increasing adverse selection); instead they are in the group for reasons unrelated to insurance, such as all working for a particular employer. A feature which is sometimes common in group insurance is that the premium cost on an individual basis may not be risk-based. Instead it is the same amount for all the insured persons in the group. So, for example, in the United States, often all employees of an employer receiving health insurance coverage pay the same premium amount for the same coverage regardless of their age or other factors. In contrast, under private individual health insurance coverage in the U.S., different insured persons will pay different premium amounts for the same coverage based on their age, location, pre-existing conditions, etc. Another distinctive feature is that under group coverage, a member of the group is generally eligible to purchase or renew coverage all whilst he or she is a member of the group subject to certain conditions. Again, using U.S. health coverage as an example, under group insurance a person will normally remain covered as long as he or she continues to work for a certain employer and pays the required insurance premiums, whereas under individual coverage, the insurance company often has the right to non-renew a person's individual health insurance policy when the policy is up for renewal, which it may do if the

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GROUP INSURANCEperson's risk profile changes.In Canada group insurance is usually purchased through larger brokerage firms such as PACE Consulting because brokers receive better rates than individual companies or unions. WHAT IS GROUP INSURANCE? Group insurance is a health care coverage plan in which individual employees or members are included under one 'master policy' owned by their employers. Because the group insurance plan has so many contributors, the policy often provides coverage for more services at a much lower cost per participant. Group insurance may be provided by other organizations besides for-profit companies. Labor unions, churches and other service groups can also obtain group insurance for recognized members and possibly their dependents. Individual members of a group insurance plan receive insurance certificates which demonstrate their eligibility for benefits. If the master policy held by the employer requires participation in an HMO (health maintenance organization), then individuals are also registered as members. Other group insurance policies may be associated with major medical groups such as Blue Cross/Blue Shield. A major medical policy may or may not restrict an individual's choice of primary physician and specialists. HMO policies often require a patient to use a specified physician, who must approve any visits to eligible specialists. Financing for a group insurance policy is commonly a flexible payroll deduction, although some companies will absorb the entire cost of the policy as a benefit for employees. As with many insurance policies, however, the cost of premiums can rise significantly without warning. If a few participants receive expensive treatments for serious medical conditions, the rest of the group may have to absorb the higher premium costs over time. Group insurers don't always require physical exams before issuing a master policy, so some participants may benefit from treatments for pre-existing conditions.

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GROUP INSURANCEDEFINITIONS OF GROUP INSURANCE: 1. Single insurance policy or contract that covers groups of employees and their dependents. 2. Collection of individuals who have regular contact and frequent interaction, mutual influence, common feeling of camaraderie, and who work together to achieve a common set of goals. 3. Subdivision of a set. 4. Insurance purchased by a group of persons, such as the employees of a company, often at a reduced individual rate.

ADVANTAGES AND DISADVANTAGES OF GROUP INSURANCE Group insurance benefits can vary widely from company to company. Almost all policies cover emergency and routine medical procedures such as regular doctor's appointments and hospital treatment for accidents. Most cover extended care in hospitals or rehabilitation centers. However, group insurance may or may not cover the employee's spouse or dependents. Some offer assistance for vision care or dental work, but coverage may be limited to specific procedures. Mental health needs may also be covered under group insurance. Prescription drug expenses often fall under group insurance benefits, but most likely with a co-pay provision. Under a co-pay plan, the covered individual must pay an established price out-of-pocket for name brand and generic medications. Group insurance is definitely more affordable than a similar number of individual policies, but there are a few drawbacks. Some members find their choices of physicians and treatments very limited under an HMO insurance plan. Even major medical plans can restrict the list of approved physicians, often called the PMD (preferred medical doctor) policy. Employers who fear large

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GROUP INSURANCEincreases in premiums may take an unusual interest in their employees' private health issues. Companies may suddenly implement stringent 'no smoking' policies or strongly encourage other preventative health care programs. Some may find this interest in their personal health to be intrusive. Group members enjoy numerous advantages that add value to a workers compensation policy, including:

Cost savings Convenient service Safety programs If you are an individual State Fund policyholder, consider converting to a

group program at renewal and discover the difference SAVINGS ADVANTAGES

All group policies receive a 6 percent discount. Because this group discount is combinable with other State Fund discounts, employers save more on their premiums.

Small employers with low payroll save by paying a reduced group minimum premium. Because of a groups mandatory loss-control threshold, employers have an added incentive to create safer workplaces and decrease their claims costs and experience modifications.

Group policyholders may also benefit from additional claims-management services, such as the Alternative Dispute Resolution program.


Trade association programs may provide advice on business procedures, legislative advocacy, and necessary forms and documents. Other group

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GROUP INSURANCEservices may include health and dental plans, legal services, and life insurance.

Many associations perform claims reviews. Close monitoring of claims can help resolve them sooner, which can result in reduced experience modification.

As a group member, you receive an additional layer of service from State Funds staff of group specialists. These resources can help employers more effectively take advantage of the trusted core of State Fund services.

Membership gives employers a voice for member feedback as well as a network for contacts and information.


Group members share a commitment to maintaining a good safety record, with selective underwriting review to maintain low group losses.

Employers get industry-focused safety services that may include the interpretation of regulations, emergency-care planning, safety seminars, and a review of workplace accidents and their costs and trends.


Must be a current member in good standing of a qualifying association. Must meet the requirements of having the proper designated governing class code or schedule.

Must meet the group underwriting criteria for the specific association. Association group is the group of individuals or companies with similar occupations such as dentists, lawyers, medical doctors etc. The association arranges group insurance for its member and individual member pays all the premiums. The master contract exists between the

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GROUP INSURANCEassociation and the insurer and individual member receives a certificate detailing coverage. I. Advantages: a) Provide more economical coverage because of mass purchase and group discounting. b) Group insurance is arranged by the Association and only requires payment to enroll. c) Provide for larger amounts of life insurance and the right to convert life insurance for each member in the association within 60 days of termination. d) Certificate is issued showing coverage.

e) Coverage may be more comprehensive and premium is lower than individual insurance.

II.Disadvantages: a) Coverage reduces in later years and premiums can be increased without notice. b) The group insurance plan amendments, restrictions or termination can be effected without input of member.

c) Most contracts contain restrictive clauses and a two-year suicide clause. d) The master policy is held by the association therefore some member may consider to opt out with an individual policy if they consider that is the best solution. e) Contract and coverages are negotiated between association and insurance company. Member of association has to no say to it.

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