Final answer:
The Probationary period provision is the part of a Group Health policy that allows an insurance company to delay coverage for a sickness after the policy starts. Different from pre-existing condition exclusions, it helps prevent immediate high-cost claims from newly enrolled members.
Step-by-step explanation:
The provision in a Group Health policy that gives an insurance company the rights to delay coverage for a covered sickness for a specified number of days after the effective date of the policy is the Probationary period provision. This period is typically included in the health insurance contract and is established as a time during which no benefits will be paid for certain pre-existing conditions or illnesses that the insured may have. It functions as a safeguard for insurance companies against individuals who might only seek insurance because they have immediate health care needs, a behavior known as adverse selection.
As implemented by laws like the Patient Protection and Affordable Care Act (ACA), an emphasis has been put on preventing insurance companies from denying coverage based on pre-existing conditions. However, the probationary period is a different concept than coverage denial. This provision rather applies to newly enrolled members, temporarily restricting coverage to prevent potential abuse of the insurance system.