Group Health Insurance

Group health care plans share a role with governments in ensuring citizens receive adequate health care by building on the minimum standard care provided by medicare. Government health care plans cover basic hospital and other medical services leaving health care plans to cover those medical products and services not covered by government plans. Generally, health care plans are not allowed to pay for services that are provided by the government health care plan. In some cases, health care plans are allowed to pick up coverage after the maximum coverage under the government plan has been reached. There has been a trend in recent times of government cost-shifting - moving a greater portion of the responsibility for funding health care to employer-sponsored health plans. Employer-sponsored plans are referred to as health care plans, extended health care, supplemental health care or major medical plans. Health care plans are highly valued by employees, especially those with families. There are many approaches that employers can take in determining what health care services and products are eligible for coverage, but, by and large, the health care plan was conceived to provide employees with non-cash compensation in a tax efficient manner and to help protect employees from expenses arising from a medical catastrophe.

Public Health Service Plan

A public health services plan is any vehicle created to provide to or reimburse a group of employees for health care and dental care expenses. The provider of the benefits earns a tax deduction for amounts spent on the plan and employees do not bear a tax burden for benefits received. To qualify as a public health services plan, the employer sponsored benefits plan must confine its benefits to the following services:

  • Services of a medical practitioner, dentist or nurse
  • hospital services;
  • medically required full time attendant or full time care in a nursing home
  • ambulance charges
  • artificial limbs, iron lung, rocking bed, wheelchair, crutches, braces, truss for hernia, ileostomy or colostomy pad, speaking and hearing aids, kidney machines
  • diapers, catheters, disposable briefs where required for incontinence brought about by illness, injury or affliction
  • eyeglasses
  • specially trained animals for blind, deaf, or physically challenged people, including the cost to feed and care for the animal
  • costs relating to the expenses of finding a suitable donor for a bone marrow or organ transplant
  • renovations of a dwelling for patients with severe and prolonged physical impairments
  • rehabilitative therapy
  • medically required medications
  • diagnostic services
  • dentures
  • and health insurance premiums

Under a public health services plan, only individuals recognized as dependents may be eligible recipients of benefits provided under the plan:

  • the employee's legally married spouse
  • the employee's common law spouse
  • the employee's common law partner in a same sex relationship
  • the employee's unmarried natural or adopted or step child up to the age of 19, or age 25 if a full time student
  • the eligible spouse's or partner's unmarried, natural or adopted or step child up to age 19, or age 25 if a full time student
  • the employee's, spouse's or partner's unmarried grandchild, and
  • a severely physically or mentally handicapped child of any age who is dependent on the employee

Health care plans normally include the following features:

  • all plans cover services or products only if medically necessary and recommended by a physician
  • the costs of covered services and products are paid only if they are reasonable and customary for a specified treatment within a region
  • expenses for many services are usually subject to a limit or maximum, including cost-sharing measures such as deductibles and coinsurance features

Covered expenses under health care plans provide benefits for the following services and supplies:

  • Prescription drugs
  • Hospital
  • Vision
  • Paramedical services
  • Medical supplies and services
  • Out of country coverage
  • Private duty nursing
  • Accidental dental

Category: Group Benefits