FAQs: Employer Group Health Insurance
- Is my employer required to offer me health insurance coverage?
There is no law on a federal or state level that requires an employer to offer health insurance coverage. An opportunity to purchase health insurance is a benefit, not a law.
- Can my employer change our health insurance carrier and level of benefits during the year?
Yes. It is completely up to the employer whether or not they will offer health insurance to employees at all and they can change carriers and level of benefits at any time.
- Are all group health insurance policies regulated by the South Carolina Department of Insurance?
No. Many plans are self-funded and do not fall within the jurisdiction of this Department. Plans that are not regulated by the South Carolina Department of Insurance fall under the laws of the U.S. Department of Labor, Employee Benefits Security Administration, 1-866-444-3272.
- What happens to my group health coverage if I leave my employer?
You may be eligible for protection under the Consolidated Omnibus Budget Reconciliation Act (COBRA) law and entitled to a minimum of 18 months of continuation coverage. You can find out more about COBRA continuation of group health benefits from the U.S. Department of Labor, Employee Benefits Security Administration, 1-866-444-3272.
- After terminating employment, how long is my employer required to continue my insurance, and under the new Federal law, isn't this coverage free and shouldn't it last forever?
The South Carolina Department of Insurance does not regulate employers. Most employers terminate coverage at midnight on the day you leave. The employer should offer you the option of continuing your insurance through COBRA (if he has 20 or more employees) or through the State Continuation of Benefits (if he has less than 20 employees and you have been covered by the group plan for six consecutive months).
Please note that under COBRA or State Continuation of Benefits, the former employee must pay the employer's portion, the employee's portion, and on COBRA, the employer may charge a 2% surcharge. There are limitations to the periods of time one can be covered. Please call us at 803-737-6180 for more information.
- What happens when my group health coverage ends?
You can apply for individual health coverage under the federal law Health Insurance Portability and Accountability Act (HIPAA). This type of policy is issued on a guaranteed issue basis if you meet the qualifying criteria. However, there is no limit on the maximum premium the company can charge. Care for pre-existing conditions may not be excluded from coverage.
My health insurance company has not paid my claim. What is the time frame for a company to process the claim?
If it is a fully insured group plan, then a claim should be either paid or denied within 60 days of receipt of all information needed to process the claim.
- I have group coverage, and I have been covered for several years. They withhold $200 from my check. I have decided that it is too much to be coming out of my check right now, so I asked my employer to cancel my coverage. He says he can't do that until January 1. Why?
Apparently, your employer is deducting your insurance premiums from your paycheck prior to assessing income taxes. There are only certain situations in which the Federal Government allows you to make changes in your deductions, except at the beginning of your new tax year. If you wish to have the specifics on this situation, please call the Federal IRS at 1-800-829-1040. That is a tax regulation, not an insurance regulation.
- What is a “self-insured” plan?
An employer may choose to “self-insure” by paying out benefits from its own funds. Typically, an insurance company is used to administer the program, but the liability for paying for the care of the workers rests on the employer. It is important for workers to understand that if their employer “self-insures,” state patient protections (such as access to internal and external appeals processes, assurance of certain benefits, and the right to have grievances heard by the State insurance department) do not apply. All federal protections (i.e., HIPAA and COBRA) do remain.