Unit 18 – Group Health Insurance Study Guide and Key Concepts 1 of 34 Unit 18 – Group Health Insurance Study Guide and Key Concepts.pdf
Unit 18 – Group Health
Insurance Study Guide and
Key Concepts
Guidehttps://www.stuvia.com/dashboard!@_)#*)(@$)($@*($@)($@*_
Page 1 of 34 Unit 18 – Group Health Insurance Study Guide and Key Concepts.pdf 2026-04-03
,Unit 18_ Group Health Insurance 2 of 34 Unit 18_ Group Health Insurance.pdf
Group Contract -Cover many people under one contract
-this reduces the plan cost and lower premiums
-premiums are less than individual coverage
Group Contract (2) * The 2 parties in a group insurance contract are:
-The insurer
-The sponsoring group
> The policyholder/owner is the sponsoring group & it controls the master
policy
Page 2 of 34 Unit 18_ Group Health Insurance.pdf 2026-04-03
,Unit 18_ Group Health Insurance 3 of 34 Unit 18_ Group Health Insurance.pdf
Group Health Insurance -participants may be classified by type of payroll, duties and length of
service
-not by age
-not a characteristic: The parties to a group health contract are the
employer and the employees
> The contract for coverage is between the insurance company and the
employer, any master policy is issued to the employer
Certificate of Coverage -The individual members covered by the group plan are not parties to the
group insurance contract
-individual members in group have no authority to make decisions
regarding the plan
-members receive a certificate of coverage that provides evidence of
coverage
>Who is covered by the plan
>Summarizes the benefits
Page 3 of 34 Unit 18_ Group Health Insurance.pdf 2026-04-03
, Unit 18_ Group Health Insurance 4 of 34 Unit 18_ Group Health Insurance.pdf
Experience Rating -In general the premium cost for group insurance is based on experience
rating
-A method of establishing the premium on the groups previous claims
experience
-The larger and more similar The group, the closer it comes to reflecting
standard mortality and morbidity rates
-experience rating is based on past and projected medical costs of the
group
Community Rating -Sets premium cost by using the same rate structure for all subscribers to
a medical expense plan
-no matter what their past lost experience has been
Page 4 of 34 Unit 18_ Group Health Insurance.pdf 2026-04-03
Unit 18 – Group Health
Insurance Study Guide and
Key Concepts
Guidehttps://www.stuvia.com/dashboard!@_)#*)(@$)($@*($@)($@*_
Page 1 of 34 Unit 18 – Group Health Insurance Study Guide and Key Concepts.pdf 2026-04-03
,Unit 18_ Group Health Insurance 2 of 34 Unit 18_ Group Health Insurance.pdf
Group Contract -Cover many people under one contract
-this reduces the plan cost and lower premiums
-premiums are less than individual coverage
Group Contract (2) * The 2 parties in a group insurance contract are:
-The insurer
-The sponsoring group
> The policyholder/owner is the sponsoring group & it controls the master
policy
Page 2 of 34 Unit 18_ Group Health Insurance.pdf 2026-04-03
,Unit 18_ Group Health Insurance 3 of 34 Unit 18_ Group Health Insurance.pdf
Group Health Insurance -participants may be classified by type of payroll, duties and length of
service
-not by age
-not a characteristic: The parties to a group health contract are the
employer and the employees
> The contract for coverage is between the insurance company and the
employer, any master policy is issued to the employer
Certificate of Coverage -The individual members covered by the group plan are not parties to the
group insurance contract
-individual members in group have no authority to make decisions
regarding the plan
-members receive a certificate of coverage that provides evidence of
coverage
>Who is covered by the plan
>Summarizes the benefits
Page 3 of 34 Unit 18_ Group Health Insurance.pdf 2026-04-03
, Unit 18_ Group Health Insurance 4 of 34 Unit 18_ Group Health Insurance.pdf
Experience Rating -In general the premium cost for group insurance is based on experience
rating
-A method of establishing the premium on the groups previous claims
experience
-The larger and more similar The group, the closer it comes to reflecting
standard mortality and morbidity rates
-experience rating is based on past and projected medical costs of the
group
Community Rating -Sets premium cost by using the same rate structure for all subscribers to
a medical expense plan
-no matter what their past lost experience has been
Page 4 of 34 Unit 18_ Group Health Insurance.pdf 2026-04-03
