California Life-Only & Accident and Health AgentAccident and Health InsuranceMedium
A small business owner is considering a group health insurance plan for her 7 employees. She wants a plan where the insurer cannot refuse coverage to any eligible employee, regardless of their health status, and where premium rates are the same for all employees within the group. Which characteristic of group health insurance is she most interested in?
- AGuaranteed Issue
- BAdverse Selection Avoidance
- CExperience Rating
- DCommunity Rating
Show answer & explanationAnswer & explanation
Correct answer: A. Guaranteed Issue
Guaranteed Issue is a characteristic of group health insurance that ensures all eligible group members can obtain coverage regardless of their health status, which aligns with the owner's desire for no refusals based on health.
Why the other options are wrong
- B. Adverse selection avoidance is a goal of group insurance, but 'Guaranteed Issue' is the mechanism that addresses the owner's specific concern about employees being denied coverage.
- C. Experience rating is a method of determining premiums based on the group's past claims history, not guaranteeing coverage.
- D. Community rating sets premiums based on the overall community's health experience, not guaranteeing issue to all individuals within a particular group.
Guaranteed Issue (Group Health)
A feature of group health insurance where an insurer must offer coverage to all eligible members of a group, regardless of their health status, without individual underwriting.
- No medical underwriting for individuals.
- Prevents individuals from being denied coverage due to health.
- Applies to eligible members of a qualified group.
Memory trick: Group policies grant guaranteed good health.