Health Insurance: Frequently asked questions

Although it might not sound fair, it is perfectly legal. Employers are allowed to determine which classes of employees, if any, are offered a health plan. A manufacturing plant, for instance, can choose to offer a health plan to executive employees or managers and not to shop floor workers. However, all of the employees in the designated class must be offered the health plan; the employer cannot offer the health plan only to select employees in that designated class.

In addition, once an HMO or insurance company extends an offer of coverage to an employer, no employee in that class can be excluded from coverage simply because he or she has health problems. The health plan can screen the health history of the individual employees in the group, but only to determine whether it will accept or reject the entire group for coverage or what group premium to charge.

When it comes to small employer group coverage, many states now require "guaranteed issue," which means an insurance company or HMO cannot refuse to cover a group, even if one or more employees or their dependents have health problems. The health status of the employees can be reviewed, but only to set the premiums for the group.

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