Can a group formed solely to obtain group insurance qualify for such coverage?

For a group to qualify for group insurance coverage, it must have a common bond or purpose beyond just obtaining insurance. This requirement is in place to ensure that the group is a legitimate collective with an underlying relationship among its members. When a group is formed solely to obtain insurance, it lacks this substantive purpose, which leads to a determination that they do not meet the qualifications for group coverage.

This regulation exists to prevent the formation of groups solely for the purpose of acquiring insurance, which could lead to increased risk for insurance providers. The intent is to create stable and sustainable insurance pools that are based on genuine associations, like those formed by employers and employees, members of a union, or participants in a professional organization. Such structures foster a legitimate shared interest among the insured individuals, which is a critical component for the insurance model to function effectively.

The other options suggest scenarios that either misinterpret the necessary criteria for group insurance eligibility or impose conditions that do not align with the established regulations. Hence, the insistence on a valid underlying purpose underscores the integrity of the group insurance system.