Group Health Insurance: 5 Things You Don't Know About Coverage

The Supreme Court has made headlines recently for tackling the constitutionality of health care reform legislation, and is expected to issue a ruling in early summer. A key provision of the law is that you must buy health insurance if you are not covered. If you have health insurance coverage from your employer, you may be counting your blessings. Even so, group health insurance plans vary widely, and so do employers' rules for who gets coverage and how much they pay. Here are five surprising things you might not know about group health plans.

1. Not all plans have to cover pregnancy.

Most employer-sponsored health insurance plans do cover pregnancy, thanks to the Pregnancy Discrimination Act of 1978. The law requires work-based health plans to cover pregnancy-related expenses just as they cover other medical conditions. But the law does not apply to companies with fewer than 15 employees. Unless mandated by state law, an employer with just a few workers on the payroll could provide health insurance that doesn't cover pregnancy.

For employers with at least 15 employees, the level of coverage for pregnancy depends on the coverage for other medical conditions, says Danielle Garrett, a health policy analyst with the National Women's Law Center in Washington, D.C. Under the law, those employers' health plans must cover pregnancy, childbirth and related conditions on the same basis they cover other medical conditions. So if a plan covers the cost of a private room for other conditions, it has to cover the cost of a private room for pregnancy-related conditions. If it covers office visits to physicians, then it must cover prenatal and postnatal visits.

Employer-sponsored group coverage is by far the main source of decent pregnancy coverage. Finding maternity coverage in the individual health insurance market is tough. Just 13% of individual health plans available to a 30-year-old woman across the country provided maternity coverage in 2009, according to the most recent figures from the National Women's Law Center.

2. Refuse to kick your bad health habits? You might have to pay more.

"Employers are telling workers, 'You need to be accountable for your health,'" says Julie Stone, a senior consultant with Towers Watson, a global consulting firm.

Some take the carrot approach. More than two-thirds of large employers offer incentives to encourage employees to take care of themselves, according to the 2012 Towers Watson/National Business Group on Health "Employer Survey on Purchasing Value in Health Care." Often the reward is a discount on the worker's portion of the premium.

But a growing number of employers are picking up the stick. 20% penalize employees for bad habits, like smoking. 10% reward or penalize employees depending on how the rate in specific health measures, such as weight or cholesterol, and 23% of employers plan to do so in 2013. (See related story "Take care or pay a higher share of your health insurance.")

3. You could be excluded from the insurance plan.

Your employer doesn't have to offer health insurance to everybody. And it can provide different levels of benefits to different groups of workers, as long as there's a clear differentiation between the groups, says Lenny Sanicola a senior practice leader of benefits for WorldatWork, a human resources nonprofit headquartered in Scottsdale, Ariz. Among the most common differentiators for coverage is whether you work full time or part time.

4. The health insurance plan doesn't have to cover your family.

Most companies that offer health insurance extend benefits to dependents, but they don't have to, Sanicola says.

Among those who do offer coverage to workers' spouses and kids, a growing number are subsidizing less of the premium for the dependents, Sanicola adds.

Meanwhile, some employers have special rules for spouses who have other coverage available. According to a 2011 survey of large employers by Mercer, 7% imposed a surcharge, and another 7% did not provide coverage at all to spouses who had coverage through their own jobs.

5. The employer doesn't have to pick up the tab for the premium.

Fortunately, most employers that offer coverage do pay most of the premium. But it's not your imagination if you think you're paying a growing share.

Employees will pay an average $2,764 of health care costs in 2012, a 9.3% jump from 2011, according to the Towers Watson/National Business Group on Health survey. That's up 40% from just five years ago.

Still, even though they're paying more, most employees remain unaware of the total cost of health insurance coverage, Sanicola says.

"It isn't until quitting a job and getting a bill for family coverage for $12,000 a month that your eyes are opened," he says.

The average total health care cost per employee, including the worker and company share of the health insurance premium, is expected to reach $11,664 this year, up 5.9% from 2011, according to Towers Watson.

The original article can be found at health insurance: 5 things you don't know about coverage