In group health insurance, the legal document that establishes the contract between the insurer and the group is the:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Group health insurance is written under a master policy issued to the policyholder — the employer, association, or trust. Covered employees do not receive the master policy; they receive certificates describing their benefits, exceptions, and terms, which refer to the master policy. Under CIC Section 10270.5(c), an individual certificate setting forth the benefits and exceptions and referring to the master policy must be delivered to each insured. The master policy remains the controlling contract between the insurer and the group.
Why the other options are wrong
- B) The certificate evidences coverage and refers to the master policy; it does not replace it, and the master policy remains the controlling contract.
- C) A binder is a temporary evidence of insurance used in some lines; group medical expense coverage is not delivered through binders to individual employees.
- D) An ID card is administrative proof used for provider billing, not a legal contract document.
Memory hook
Master policy = the constitution; certificate = the membership card. Employees hold the card, the employer holds the constitution.