Group Health and Marketplace Basics

How Do Individual and Group Health Contracts Differ?

An employer-sponsored plan covers eligible workers and dependents according to plan rules.

• Employees may receive a certificate or summary, while the governing plan documents describe eligibility, benefits, claims, appeals, and cost sharing, the member's share of covered care costs.
• A contributory plan asks covered members to pay part or all of the premium, the price of coverage. A noncontributory plan is funded by the sponsor.

Group coverage may include a spouse or dependent children when they meet the plan's eligibility definition.

• The employee should check enrollment rules, covered dependent categories, and how a change in employment or family status affects eligibility.
• A dependent's coverage is part of the plan arrangement; it does not make that person the owner of the group contract.

The dependent child's covered services, cost sharing, and any benefit limits come from the plan and certificate.

• The child may lose eligibility when the plan's terms and applicable law say coverage ends; the employee's own coverage can continue on a different basis.

What Happens When Group Eligibility Ends?

Group coverage can end when employment or eligibility changes.

• The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) may allow qualified beneficiaries, people who meet its coverage and event rules, to temporarily continue group coverage. These can include covered employees and eligible family members.
• The person continuing coverage generally pays the full premium, plus any permitted administrative charge.
  • The usual federal ceiling is 102% of the total plan premium: the employee and employer shares plus up to 2% for administration. Different premium rules can apply during a disability extension.
• State continuation laws may provide additional rights for some plans or employers.

Exam Tip: Gotchas

• COBRA continues an existing group plan for a limited period; it is not a new individual policy.

For example, a worker who leaves a job may lose eligibility under the employer's plan. The worker should read the plan's continuation notice and compare its cost and covered providers with other available coverage before choosing a path. A provider network is the group of health professionals and facilities contracted with a particular plan.

How Do Federal Rules Protect Group Participants?

Applicable employment-based group medical plans also protect participants from health-based treatment.

• They cannot impose pre-existing-condition exclusions.
• They cannot single out a participant for denied eligibility or reduced benefits because of health factors, and generally cannot charge that participant more than a similarly situated participant because of those factors.
  • Similarly situated means comparable under permitted plan classifications, such as full-time versus part-time employment. The plan cannot create a class aimed at an individual's health condition.
• This participant-level rule does not require identical aggregate premiums for different employer groups.
• Apply these protections only to group medical plans and coverage subject to them. Limited coverage follows its actual governing terms.

Dependent eligibility and special enrollment

• If a parent's employer health plan is subject to the federal age-26 provision and offers dependent-child coverage, it must make that coverage available until the child turns 26.
• That protection remains even if the child:
  • gets married;
  • has a child;
  • lives elsewhere;
  • becomes financially independent;
  • leaves school; or
  • is eligible for their own employer's plan.
• Student status alone does not extend the protection beyond age 26; check additional plan or state rights separately.
• The rule does not require a plan with no dependent-child benefit to create one, and it does not require coverage for the adult child's spouse or children.
• Birth, adoption, or placement for adoption can open special enrollment in a group plan that offers dependent coverage. Request enrollment within the plan's allowed period, which must be at least 30 days after the event.
• With timely special enrollment, coverage for birth, adoption, or placement for adoption takes effect no later than the event date. A medical claim does not replace an enrollment request.

Enrollment after losing job-based coverage

• Loss of job-based coverage can open a Special Enrollment Period outside the annual enrollment window.
• Verify the current enrollment route, effective date, cost, provider access, and actual plan terms before choosing between available options.

How Do Marketplace Protections and Plan Categories Work?

Marketplace plans cannot reject someone, charge more, or refuse to cover treatment for a pre-existing condition because of that condition.

• Marketplace plans cover essential health benefit categories, though the specific covered services and plan details can vary by state.

• The gross premium is the plan's price before financial assistance.

• If assistance applies, the net monthly premium is the amount the household pays after that assistance. Current official facts and rules determine whether assistance is available and the amount.

• Choosing a metal category alone does not establish eligibility for help paying premiums.

• The four metal categories are Bronze, Silver, Gold, and Platinum. They describe the average share of covered costs that a plan pays across members; they do not describe quality or predict a single person's exact bill.

Exam Tip: Gotchas

• Metal categories describe cost sharing, not plan quality.

Compare the coverage

Compare monthly premium, deductible, copayments, coinsurance, out-of-pocket maximum, provider network, drug coverage, approval requirements, and enrollment rights.

• Premium: The recurring coverage price, separate from the bill for a medical service. It is owed even when no services are used.
• Deductible: What the member pays for specified covered services before the plan begins sharing those costs. Some services have different rules, including qualifying preventive care before the deductible.
• Copayment: A fixed amount for a covered service. Check whether it applies before or after that service's deductible.
• Coinsurance: A percentage share of a covered cost. When the plan requires a deductible first, apply the remaining deductible and then calculate coinsurance on the remaining covered amount.
• Allowed amount: The amount the plan recognizes for a covered service. It can be lower than the provider's billed charge.
• Out-of-pocket maximum: The plan-year cap on qualifying covered in-network cost sharing. Once it is met, the plan pays those covered benefits' qualifying costs for the rest of the year. Premiums, noncovered services, ordinary out-of-network costs, and charges above the allowed amount do not count toward it.
• Prior authorization: A plan's advance medical-necessity decision for a service or item. It may be required before nonemergency care, but it does not guarantee the later claim will be paid; coverage and other plan conditions still apply.
• For continuation coverage, compare its cost and existing providers with Marketplace or other group options.
• A change in work or family circumstances can affect the available enrollment path.

Example: An in-network covered service has a $1,000 allowed amount. The member has $200 left on the deductible, then owes 20% coinsurance. No copayment or other limit applies:

1. Subtract the deductible: $1,000 − $200 = $800.
2. Calculate coinsurance: $800 × 20% = $160.
3. Add the member's costs: $200 + $160 = $360. The plan pays the remaining $640.

Current federal rules and state Marketplace features can change.

• Use the official Marketplace and plan materials to verify enrollment dates, subsidies, and covered services.

What Should You Check on Exam Day?

• What continuation or Marketplace option may apply?
• Which current plan terms govern enrollment, cost, and coverage?
• Who holds an individual policy or an insured group policy?
• Which plan and federal rules govern dependent-child eligibility?
• What do metal categories describe, and what do they leave undecided?