Table Of ContentGROUP
INSURANCE
FOURTH EDITION
WILLIAM F. BLUHM
PRINCIPAL EDITOR
ASSOCIATE EDITORS
ROBERT B. CUMMING
ALAN D. FORD
JERRY E. LUSK
PETER L. PERKINS
Group
Insurance
Fourth Edition
Principal Editor
William F. Bluhm
Associate Editors
Robert B. Cumming
Alan D. Ford
Jerry E. Lusk
Peter L. Perkins
This text is a comprehensive treatment of
all aspects of group insurance in the
United States and Canada, both life and
health, with emphasis on the actuarial
aspects of this important field of
insurance.
Since its original publication in 1992,
Group Insurance has become the re-
source of choice for experts as well as
beginners. The Society of Actuaries has
adopted portions of each prior edition for
use in its examination program, making
it required reading for those who wish to
become Fellows of the Society of Actu-
aries.
The Fourth Edition has been exten-
sively revised, containing some entirely
new chapters and some that have been
substantially rewritten. Many of the
changes were made to realign the text
with changes in the Society of Actuaries
education syllabus. As well, changes in
the group marketplace have been reflect-
ed, and the scope of material has been
increased in some areas, such as in the
descriptions of new coverages. In addi-
tion, a new section addressing actuarial
practice has been added.
(■continued on back flap)
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https://archive.org/details/isbn_9781566984485
GROUP INSURANCE
FOURTH EDITION
PRINCIPAL EDITOR
ASSOCIATE EDITORS
ROBERT B. GUMMING
ALAN D. FORD
JERRY E. LUSK
PETER L. PERKINS
ACTEX PUBLICATIONS
WINSTED, CONNECTICUT
Copyright © 2003
All rights reserved. No portion of this
book may be reproduced in any form or
by any means without the prior written
permission of the copyright owner.
Request for permission should be addressed to:
AC'TEX Publications, Inc.
P.O. Box 974
Winsted, CT 06098
Manufactured in the United States of America
10 9 8 7 6 5 4 3 2
Cover Design by MJB
Library of Congress Cataloging-in-Publication data
Group Insurance / William F. Bluhm, principal editor,
p. cm.
Includes bibliographical references.
ISBN: 1-56698-448-3
1. Insurance, Group - United States. 2. Insurance, Group - Law
and legislation - United States. I. Bluhm, William F., 1952-
HG8058. G748 1992
368.3’00973 - dc20 92-31337
ISBN: 1-56698-448-3
The first edition of Group Insurance began in a conceptual stage around
1987, as an outgrowth of my involvement in the Society of Actuaries’
Education and Examination Committee. The second and third editions
were ‘nudges’ in the direction of the changing landscape of group
insurance and actuarial practice. This latest edition might better be called
a full-fledged ‘shove.’ I encourage readers to contact me with comments
and suggestions on the content and direction - particularly actuarial
students, and particularly while the material is fresh in your minds.
There are many people who have contributed to each of the four
editions in different ways. This includes some technical support, but
mostly moral support. I will not try to list all of them here - the list
would be overly long, I would end up always wanting to add more, and,
of greater concern to me, would miss someone whom I don’t want to
hurt. However, to each of you who has given encouragement and
support, I give you my sincere and heartfelt thanks.
There are, however, a few people who stand out far and away
above the rest.
The first is my dear friend Dick London. Dick founded Actex,
and nourished it unselfishly to its impressive position today. Along the
way, he got excited about this book, championed it in a way no one else
has, and, most of all, respected my desire to maintain creative control
over it. Dick is one of those few friends I have found through my life that
I know I can count on, who has rejoiced in my journey, and who values
the friendship as much as I do.
m
Preface
IV
I also want to acknowledge the contribution of Marilyn Baleshiski
at Actex, who has returned to this project as its formatting editor after an
absence of one edition. Thanks, Marilyn.
I thank Christine, Samantha, and Joey, my family, for their love
and understanding. You are the most precious part of my life.
Finally, I would like to dedicate this book to Debbie Demay,
who last year sadly left those of us who loved her. She was a rock of ad-
ministrative support, helping me through multiple editions, with multiple
headaches, always doing so as a professional and a lady. Debbie, you are
still in, and will stay in, our hearts and memories.
Minneapolis, Minnesota William F. Bluhm, FSA, MAAA
March 2003 Principal Editor
Table of Contents
Preface
iii
◄SECTION ONE ►
INTRODUCTION
Chapter 1 The Group Insurance Marketplace 3
%ara L. Clarke
Chapter 2 Overview of Sales and Marketing
rWitfiam JA. (RaaS 19
Chapter 3 Health Care Policy and Group Insurance
Jeffrey Cj. JAtfen 35
◄SECTION TWO>
GROUP COVERAGES, BENEFITS, AND PLAN PROVISIONS
Chapter 4 Group Life Insurance Benefits
JUicfiaeCj. Tfiompson
Tra n ^ Cassa n cfra 59
v
Table of Contents
VI
Chapter 5 Group Disability Income Benefits
(Michaef(D. Lacfance 83
Chapter 6 Medical Benefits in the United States
CDarreCf(D. TJnapp 95
Chapter 7 Medical Benefits in Canada
(Bruno Cjagnon 119
Chapter 8 Dental Benefits in the United States
JferscheC (Reich 145
Chapter 9 Prescription Drug Benefits
JAuctrey JfaCvorson 167
Chapter 10 Group Long-Term Care Insurance
(MaCcoCm Cheung 183
Chapter 11 Miscellaneous Benefits
iCiCCiam J. Thompson 209
Chapter 12 Government Old-Age, Survivors,
and Disability Plans in the United States
(Bruce D. SchoSeC 221
Chapter 13 Government Health Care Plans in the United States
John Vj. (BauerCein 227
◄SECTION THRI:I>
OVERVIEW OF LEGAL AND REGULATORY ENVIRONMENT
Chapter 14 Principles of Health Insurance Regulation
Jufia (PhiCips
Leigh Tt. VCachenheim 247
Chapter 15 Regulation in the United States
(EdwardL. (Potanha
%eith (M. A ndrews 259
Chapter 16 Regulation in Canada
(David(B. (Martin
(NicoCa (parf{er-Smith 325
