Group health insurance is an employer-sponsored policy in which they pay at least 50% of the premium.
An employer can offer group health insurance to employees if it can meet its participation requirement; usually about 50%-75% of full-time employees. If an employee already has valid health insurance coverage, they are automatically counted towards total participation. These participants are guaranteed coverage as long as they have not allowed their previous coverage to lapse within a certain time-frame. This is state-mandated but is usually about 60 days.
Each state also mandates how the plans are underwritten. Any company who wants to offer group health insurance policies must file their best possible rate with that state’s department of insurance. An insurance company cannot charge varying rates for each employee regardless of an employee’s medical condition. Once each employee applies for coverage, a maximum extra charge in addition to the base rate is applied the group’s premiums.
What that means is, if you are a healthy individual and you don’t have children or family members with special medical conditions, a group policy may be more expensive than an individual plan. Because insurance companies offer a bulk group policy price to all employees, it must try to compensate for employees who will seek medical services more often than someone who might see doctor once or twice a year. Conversely, an individual insurance policy means that the company can assess your healthcare needs and pertinent medical conditions on an individual basis and may be a more affordable option.
Group health insurance can also feature several tiers of coverage to suit different employee types. The healthy employee may be able to choose a plan with a higher deductible but lower premium. Other employees who require more frequent healthcare coverage may choose another plan, perhaps with a low deductible and higher premium. This allows them to see their physicians or medical professional as needed without a substantial out-of-pocket commitment. Both types of plans will usually require a co-payment, usually $10-$20, for each office visit.
Your employer will decide which plan or plans it wants to offer. They will also determine how long your probationary period is before you’re eligible for their group policy. Usually this is between 30-90 days.
A company which offers a group health insurance policy will also be required to carry COBRA coverage if they retain 20 or more full-time employees. COBRA must be extended to all voluntarily or involuntarily terminated employees. COBRA is more expensive than your employer’s group policy because they are no longer obligated to pay any part of your premium. The advantage COBRA has is that it allows you to retain your insurance coverage if you are in the middle of a course of medical treatment or are pursuing physical therapy after an accident.
Now that you know more about group health insurance and are able to make a more informed decision, find out how you can start saving now by getting a quote from InsuranceUSA.com!