Who Qualifies for Group Coverage
- Typically, employees must be eligible according to their employer’s standards – such as having a full time schedule. Also, your employer may not be able to insure you if you live outside the coverage area of their chosen HMO, if applicable.
- However, group health plans cannot decline coverage or increase rates (like individual plans) on the account of health conditions. If you have a preexisting condition, disability, or have had a condition in the past, insurers must accept you as part of a group plan, as they abide by a nondiscrimination policy.
Waiting Periods & Enrollment
- A waiting period is often imposed before you are fully enrolled in a group health plan. This is a time that can last anywhere from 30 days to six months, and has nothing to do with a person’s health status. The insurer is assessing other risks involved that have more to do with helping the employer and the insurer avoid fraud. It is important to make sure you have another form of health insurance while you are waiting to be approved.
- If your employer offers coverage through an HMO, the HMO may issue an affiliation period for the same reasons as the insurer’s waiting period. During this time, you should find either a short-term plan, or stay on your current health plan. The affiliation period can last up to two months, or three months for late enrollees, and the HMO is unable to impose an exclusion period for preexisting conditions if they impose an affiliation period.
- Special enrollment periods are granted to those who have life events such as a birth, death, divorce, or other changes in their family. Once this event has taken place, the employees affected must be offered an additional opportunity to sign up for coverage or change their benefits, in addition to typical open enrollment periods. Based on the type of event, special enrollment periods can continue for 30 or 60 days. This is also not considered late enrollment due to the nature of the life event.
Events with 30-day Special Enrollment
- Birth, adoption, or placement for adoption of a child
- Involuntary loss of health coverage (including death, divorce, legal separation, retirement, being laid off or losing work hours)
Events with 60-day Special Enrollment
- Loss of eligibility under Medicaid or SCHIP
- Loss of eligibility for Medicaid or SCHIP premium assistance subsidy for group coverage
Texas Dependent Coverage
- Texas state law states that small employers who offer health benefits through a fully insured plan must also cover spouses and dependents. Large employers who are fully insured are not required to offer spouse and dependent coverage, though if they do, they have to offer benefits to eligible spouses and dependents of employees.
- Newborns and adopted children automatically receive health benefits through their parent’s group health insurance from the day of their birth or adoption for 31 days. The insured parent must enroll their child within this 31-day period in order to get them fully covered as a dependent.
- Grandchildren can also be covered, according to state law in Texas, under a comprehensive group health insurance policy. However, grandchildren must be under 25 years old, unmarried, and a dependent of their grandparent to be eligible, and the plan must cover dependents.
- Adult children with disabilities can stay insured through their parent’s group coverage after they reach the age limit (26) for the end of dependent coverage. To be eligible, the dependent must be unable to work enough to support themselves and primarily reliant on the policyholder for care and support.
- Group plans must cover dependent children on a parent’s plan until age 26, if the plan provides health benefits to dependents.
The Family and Medical Leave Act (FMLA) allows individuals who leave work due to illness, giving birth or adopting, or taking care of a very sick relative to continue receiving their health benefits for a short time period. This is a federal law, which gives an employee up to 12 weeks of job-protected leave in such situations.
The FMLA is applicable to employees in group health plans at a large business with more than 50 workers. Employers are required to continue coverage for those who are eligible for leave under FMLA, and employees will keep paying their share of the premium. If a worker decides not to return to the job after the leave, an employer has the right to request that they pay the employer’s portion of the premium for that period. Employees do no have to pay back their employer’s share if they do not return to work for reasons outside of their control, however. These factors would include instances such as needing to continue caring for a sick relative, or if a their spouse is transferred to a job in a distant city.
More details regarding a person’s FMLA rights are available through the U.S. Department of Labor.
Group Coverage & Preexisting Conditions
Upon enrollment in a group insurance plan, the employer or insurer may ask if you have any preexisting conditions. Also, if you receive care for some health issue within your first year of coverage, your plan may check your medical history to see if it was for a preexisting condition. However, the insurer cannot issue an exclusion period so as not to cover care for that condition. Under the Affordable Care Act, no health plan can exclude coverage for any amount of time.
HMOs also cannot issue an exclusion period for conditions, but they have never done so, even before the ACA. As mentioned above, they may conversely impose an affiliation period for up to 2 or 3 months instead, unrelated to health status. No group health plan, HMO, EPO, POS, or PPO, can issue exclusion periods for pregnancy, newborns, adopted children, or genetic information.
Group health plans in Texas must provide credit for continuous creditable coverage to those who are hit with preexisting condition exclusions. This means the policyholders affected by the exclusion can use this credit to pay for care received for their condition that is not covered by the plan during this time. Coverage is considered continuous if you have not had a gap of 63 or more consecutive days without insurance. Most health plans provide a certificate of creditable coverage when a person leaves their plan.
Types of Creditable Coverage
The majority of health insurance plans are considered creditable coverage, such as:
Children’s Health Insurance Program
Federal Employees Health Benefits (FEHBP)
Military health coverage (CHAMPUS, TRICARE)
Foreign National Coverage
Group health plan (including COBRA)
State high-risk pools and PCIP
Indian Health Service
Student health insurance
When Leaving Your Group Health Plan
Thanks to federal coverage laws, those who leave their job and therefore lose their coverage may be able to get COBRA or other continuation of benefits for a certain number of months. See Individual Health Plans for more information about COBRA continuation coverage, state continuation coverage, conversion coverage, and the Texas Health Insurance Risk Pool.
Those who lose their group coverage and receive assistance from the Trade Adjustment Assistance (TAA) Program may qualify for a federal income tax credit to help them pay for a new plan. The Health Coverage Tax Credit (HCTC) is equal to 80% of the cost of qualified health coverage, including COBRA and a policy offered through the Texas Health Insurance Risk Pool. (see Financial Assistance)