Group Benefits Plan Concepts Flashcards

What is 'experience rating' in the context of group insurance renewals?

Answer: Setting renewal premiums based on the group's actual claims history

Experience rating uses a group's actual claims history to determine renewal premiums, rewarding groups with good claims experience with lower rates.

What is the role of the 'plan sponsor' in a group benefits arrangement?

Answer: The employer or organization that establishes and maintains the group benefits plan

The plan sponsor is the employer or organization that establishes, funds, and maintains the group benefits plan for its employees or members.

What is a 'pooled benefit' in group insurance terminology?

Answer: A high-cost benefit where the risk is shared across many groups rather than rated on individual group experience

Pooled benefits are those where large claims are shared across many groups to protect individual groups from catastrophic cost fluctuations.

What is the difference between a contributory and non-contributory group benefits plan?

Answer: Contributory plans require employee premium contributions; non-contributory plans are fully employer-paid

In a contributory plan, employees pay a portion of the premiums, while in a non-contributory plan, the employer pays 100% of the premiums.

What is a 'dependent' under most Canadian group benefits plans?

Answer: A spouse or common-law partner and eligible children as defined by the plan

Most group plans define dependents as the employee's spouse or common-law partner and eligible children, with specific age and status criteria defined in the plan.

What does the 'conversion privilege' in a group life insurance plan allow?

Answer: Converting group life coverage to an individual policy when leaving the group without evidence of insurability

The conversion privilege allows departing employees to convert their group life insurance to an individual policy without providing medical evidence, ensuring continued coverage.