Under California law, a group health insurance policy may be issued to a labor union to cover:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
California Insurance Code Section 10270.5 recognizes labor unions as an eligible group for group disability (health) insurance. The union acts as the group policyholder, and coverage is extended to its members and their eligible dependents. Eligibility is limited to the union's membership — the plan cannot be marketed to the general public. The same code section establishes the other eligible group categories, such as employers covering their employees, which underpin the group medical market in California. A union-sponsored group is a classic example of a bona fide group because its members share a common employment-related relationship, which reduces the risk of adverse selection. Insurers must verify the group relationship before issuing coverage.
Why the other options are wrong
- B) A group issued to a union covers the membership, not only officers; restricting it to officers would defeat the purpose of a membership group.
- C) Group health eligibility is confined to the group's members; the general public cannot buy into a union group plan.
- D) Coverage does not extend to employees of unrelated companies; the group must share a common relationship through the union.
Memory hook
Union group = members only. The union holds the master contract, workers get the certificates.