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Health Insurance Coverage

Association Health Insurance Coverage

Joining an association in order to be part of a "large group" to get a better health insurance rate is a vain hope. An association with many members may be a large group, but it is not necessarily a bona-fide large group in the health insurance business. If each member is underwritten as an individual for health insurance coverage, then how is it any more than the sale of individual coverage using an association format as a marketing ploy?

If acceptance is guaranteed, there is a problem with too many members with health problems outweighing the enrolment of those with no health problems. Sooner or later, the healthy will quit the plan because they can find lower cost health insurance coverage elsewhere. The only true large groups are situations where the group was not formed for the purpose of buying health insurance and a certain minimum percentage of members of the group must enroll, e.g., an employer buying insurance for employees with at least 75% of eligible employees on the plan.

Very often, the offering of supposed association health insurance coverage is a mere marketing ploy to sell individual health insurance. Falling for petty deception in health insurance can lead to poor decisions and maybe even poor health from not getting medical attention as a result. Pick from the best of the honestly presented individual health insurance plans. Can you really trust anyone who pretends that there is a price benefit derived from an association when that really is not the case with health insurance?

There is an exception to this in one state where laws guarantee that any individual can buy health insurance irrespective of health status. The result is very high rates for individuals, but it is possible to join a consumer association not explicitly formed for buying insurance which can screen members for life insurance eligibility, and thereby result in screening for the health insurance benefits, and thereby provide lower rates for healthy applicants.

Sloakum Health Insurance Coverage

Employer Health Insurance Coverage

If an employer provides health insurance coverage, each eligible employee is covered irrespective of medical history. There are no exclusion riders on pre-existing conditions and the cost for health insurance coverage for a specific employee does not depend on the health conditions of that specific employee. If there is a waiting period for pre-existing conditions, there is usually a month's credit against that for every month that the employee was on prior health insurance coverage if the gap is no more than so many days, e.g., 90 days.

Health insurance coverage for small employers (2 - 50 employees) is guaranteed issue under the federal HIPAA law of 1996 (see sec. 2711 on p. 28), but the premium is not controlled in any way unless state law provides otherwise. For example, the premium for the group as a whole may be adjusted initially based on the health history of all the employees to be covered, and adjusted annually based on claims made, within certain limits, dependent on the particular state's law. If premiums are set according to the claims of all small groups in a geographic area, it is known as community rated health insurance coverage. Any such adjustments vary from state to state.

If employment is terminated, the employee and dependents can remain on the health insurance coverage for up to 18 months provided the employee pays for it. Under the federal COBRA law, the employer must have 20 or more employees for this health insurance right to exist. Many state laws extend this mandate to all other employer plans, but conditions may vary, e.g., under state law, the employee may have had to be on the health insurance coverage for six months prior to termination of employment.

Group and individual health insurance coverage cannot be terminated because claims are made, i.e., it is guaranteed renewable. However, some health insurance companies have tried to find ways to raise an individual's rates because of claims made, but this is usually vigorously opposed by regulators and thwarted by law or regulation.

Large Group Health Insurance Coverage

Employer group coverage of more than 50 employees has less legislative protection than small group or individual health insurance coverage. Typically, large groups are not guaranteed to be issued any health insurance and the premium is based on the claims history or expected claims history of the group. The individual employee does not have lesser rights under COBRA, HIPAA, or other laws, but some lesser sized large groups have had to abandon their health insurance because large claims have made the renewal premiums prohibitive.

By contrast, claims for small group employer health insurance coverage (50 employees or less), are pooled together on a community basis, and there are limits on how much a particular small employer can be charged.

Buy Health Insurance Coverage from a Licensed Representative

If an application is made with a health insurance licensed representative, then most likely the plan being sold is also licensed. However, this is not always the case. Sometimes a licensed health insurance producer makes the mistake of getting involved with an unlicensed operation because the prices are so low and the sales are easy. Depending on state law governing health insurance, such persons may then incur liability for any unpaid claims of the unlicensed health "insurance" coverage, because they should have known better.

¶ Nothing here constitutes advice or recommendation of any nature, whether legal, tax, financial planning or otherwise. The comments above represent only the author's understanding of health insurance and may be incorrect or out of date.