Group Benefits Plan Concepts Flashcards

What is the primary advantage of group insurance over individual insurance for employees?

Answer: Lower cost due to group underwriting and employer premium sharing

Group insurance is typically less expensive because the risk is spread across many members and employers usually share premium costs.

What does 'Administrative Services Only' (ASO) mean in the context of group benefits?

Answer: The insurer provides only administrative support while the employer self-insures the risk

Under an ASO arrangement, the employer retains the financial risk of claims while the insurer provides administrative services such as claims processing and plan management.

What is a 'health spending account' (HSA) in Canadian group benefits?

Answer: An employer-funded account that reimburses eligible medical and dental expenses not covered by the base plan

A health spending account is an employer-funded benefit that reimburses employees for eligible medical and dental expenses, providing flexible coverage beyond the base plan.

In a group benefits plan, what is the purpose of the 'non-evidence maximum' (NEM)?

Answer: The maximum coverage amount available without requiring individual medical evidence

The non-evidence maximum is the coverage amount up to which employees can obtain coverage without providing individual medical evidence of insurability.

What is the typical waiting period before a new employee becomes eligible for group benefits in Canada?

Answer: Usually 3 months, though it varies by employer

The most common waiting period for group benefits eligibility is 3 months, though employers can set different periods based on their plan design.

What is a 'flex benefits' or 'flexible benefits' plan in the Canadian group benefits context?

Answer: A plan where employees can choose their own benefit options from a menu of choices

A flexible benefits plan allows employees to customize their coverage by choosing from a menu of benefit options, allocating employer-provided credits according to their personal needs.