Group Health Insurance

Group Health Insurance

Group health insurance offers reasonably priced health care coverage for millions of Americans who would otherwise not be able to afford it. Whether you’re currently considering taking advantage of a group health insurance plan offered through an employer or simply want to know more about it, you’ll want to read all of the information below...

What is group health insurance?

Group health insurance plans are employer-sponsored plans that provide coverage for business owners, employees, and sometimes dependents of the owners and employees. Employers are the ones who select the group health insurance plan and then invite their employers to opt in. Often employees have to work for an employer or company for a certain amount of time before being eligible for the group health insurance plan. Once on a group insurance plan, employees usually have the opportunity once per year to opt out or to continue being covered.

Having an employer-sponsored group plan means that coverage costs are shared by employers and employees, making health insurance more affordable for all involved in the group plan.

Group health insurance benefits for employers

Group health insurance benefits employers in several ways. First, offering group health insurance enables employers to attract and maintain quality workers. Employees consider the opportunity for group health insurance to be a top priority when deciding which companies to apply and to work for. Second, employee premiums are usually tax-deductible since approximately fifty percent of the premium for group health insurance is paid for by the employer. Other tax incentives might also be available to employers offering group health.

Group health insurance benefits for employees

Employees also benefit from group health insurance plans. With employers covering fifty percent or more of premiums, employees can save money getting insurance this way. Also, workers with pre-existing conditions or medical histories can’t be turned down. So employees who would otherwise not be able to afford or to get coverage at all can enjoy health insurance benefits through a group health insurance plan.

Types of group health insurance

There are several different types of group health insurance options. With a fully insured employer group, the business owner or employer contracts with an insurance company providing certificates to employees.

HMO and PPO plans are two common forms of group health insurance. HMO, or Health Maintenance Organization, plans provide comprehensive medical services to participants through a network of contracted physicians and hospitals that are considered "in-network". Under this type of group health insurance policy employees must pick in-network providers if they are to receive insurance coverage for those services.

With a PPO, or Preferred Provider Organization, plan, there is still a health care network that contracts with health insurance companies to provide health services to enrollees. However, a PPO offers more flexibility than an HMO plan since participants who choose to receive services from an "out-of-network" provider can still receive some coverage for those services.