Guide to Group Health Insurance
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Group health insurance is the coverage businesses offer to their workers. Some associations also provide it to their members. Group health insurance tends to be cheap for policyholders compared to other forms of private insurance.
[format type="bold" value="Almost"/] half of all Americans have group health insurance, mostly through their job or a family member's job. That makes it the most popular form of health insurance in the country.What is a group health plan?
A group health plan is most commonly a medical insurance policy offered by an employer to its employees. The plans are usually the cheapest insurance options if you have access to them.
Federal law requires that all businesses with 50 or more full-time employees offer a health insurance plan that meets the Affordable Care Act’s minimum essential coverage areas.
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Outpatient care
- Inpatient care
- Emergency services
- Pregnancy, maternity and newborn care
- Mental health and substance use disorder services
- Prescription drugs
- Rehabilitation services and devices
- Laboratory services
- Preventive, wellness and chronic disease services
- Pediatric services
Small business owners aren’t legally obligated to provide their workers with health insurance. However, they may qualify for a small business health care tax credit if they voluntarily offer their full-time employees a group health care option.
Group health plans can take several different forms. For example, your employer may offer an HMO or a PPO as part of its group health offering.
Group health benefits
Most group health plans are heavily subsidized by the employer. The average worker is responsible for less than a third of their monthly insurance cost. Many employers also bundle additional coverage options, such as dental insurance, along with their main plan.
Employees' monthly premiums are paid using pretax dollars. This saves money and lowers your taxable income.
How does group insurance differ from individual insurance?
Group health insurance is most commonly purchased through an employer or organization you are a member of, which usually means lower rates. Individual insurance can often be expensive, and you will have to buy your policy through your state’s health insurance exchange or directly from an insurance provider.
Although group health insurance plans tend to be cheaper, you have more options when shopping for individual health policies. Employers often limit their employees to just a few plan choices. Some companies only provide a single plan option.
To buy individual health insurance, usually you must wait for the next open enrollment period to begin. Open enrollment only opens up once per year. However, when you start a new job, you can sign up for a group health plan regardless of the date.
Who can get group health insurance?
Generally speaking, only full-time workers get group health insurance. Most businesses don’t extend coverage to independent contractors, part-time employees and retired workers.
Self-employed workers who belong to an association group like the Writers Guild of America may also have access to group membership. While nonemployer group insurance may lower your monthly insurance bill, it’s important to remember that you will be responsible for the entire cost of your monthly insurance premium.
Frequently asked questions
What is group health insurance?
A group health plan brings together a large group of people who all purchase insurance from the same company. Many businesses provide group health insurance to their employees. Some nonbusiness organizations, such as colleges and freelancing groups, also offer group health plans to their members.
How does group insurance differ from individual insurance?
You can purchase group health insurance directly through an employer or membership-based organization. Individual health insurance is available through your state health exchange or directly through a private insurer.
Group health coverage tends to be cheaper than individual insurance. Many employers heavily subsidize their workers’ health insurance. Individual health plans do not receive employer subsidies, although you may be able to deduct your health insurance premiums on your taxes if you are self-employed.
What is a group number on an insurance card?
The group number identifies the employer or organization sponsoring the
Can a company deny plan participation?
No, the law requires that employers make health care coverage available to all eligible workers. These rules prevent businesses from discriminating against elderly employees since age affects health insurance costs.
What’s the difference between group insurance and a blanket health policy?
Unlike group insurance, a blanket health policy is not meant to provide comprehensive health care benefits for full-time employees. Instead, it provides accident-only coverage that’s limited to a specific purpose. For example, a college may purchase blanket health insurance for its cheerleading squad.
Can you keep your group health insurance if you lose your job?
If you lose your job, you can use COBRA to maintain your existing coverage while unemployed for up to 36 months. However, you will be responsible for paying the full cost of the policy during this time. This makes COBRA an expensive option in most cases.
Sources
Information about group health insurance is based on resources provided by the Social Security Administration. Additional sources include the Kaiser Family Foundation for information about employer health care subsidies and the Department of Labor for information regarding COBRA.