Understanding Employee / Group Benefits Insurance Policies

17.10.2018
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Employee / Group Benefits

A group health plan/insurance policy bought by an employer or by an employee organization (such as a union), or both, for its employees or participants or their dependents, is called as employee/group benefits policy.

Some of the important terms are as follows:

1) Fiduciary
A fiduciary is a person who owns a plan, means he will take care of plans so that if there is any type of loss then it should be minimal. In layman’s term, he/she can be a particular person in the organization or an officer with a particular designation.

2) Employee Retirement Income Security Act (ERISA)
This act sets some minimal standard for employee’s health and retirement plan. There are many amendments to this act. The most important amendments are :
COBRA
HIPAA

3) Consolidated Omnibus Budget Reconciliation Act (COBRA)
In this group of health coverage, the employer gives an opportunity to previous year’s employee which are not an employee of the organization now, for a temporary extension of health coverage.

4) Health Insurance Portability and Accountability Act (HIPAA)
The participants and beneficiaries in group health plans get protection and rights due to this plan. This act provides right to get individual health plans if you have no group health coverage and COBRA plan is also expired or any other continuation coverage.

Example:

Suppose a company bought an insurance plan/package for its employees and their dependents – this plan or package is called as Benefits. In our company, we have an ICICI Lombard insurance plan in which employee, spouse and kids are covered. The person who managed these policies is called as Fiduciary. In our case, HR is fiduciary since she manages all the policy related document.

There are few policies which are either for employees or their dependents like child care policies are only applicable for children or pregnant women so these policies should never be assigned to a male employee.
If a policy is assigned to an employee or dependent for some time then it is assigned the policy, after that, it will be declined policy or If an employee leaves his job then his status will be COBRA and all assigned policies will be declined.

If a COBRA employee wants to get a COBRA plan then the employer should give some percentage of premium amount and rest of amount will be paid by the employee.

Bibliography :
Health Plans US
Employee Health Related laws

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