Group Health Insurance: Advantages And Disadvantages

Group health insurance is an insurance policy that provides health coverage for a group of people. Here instead of an individual policy, people choose to enroll in a group plan to get health insurance coverage.

Usually a company or small business establishes a group health insurance plan to cover its employees, however, this form of health insurance is not limited to employers only.

Clubs, organizations, chambers of commerce, special interest groups, trade associations and religious groups can also offer group health care for their members.

There Are Many Benefits To Being In A Group Health Insurance Plan

• After initial set-up costs, group plans are cheaper than individual plans because the insurance companies profit from having more people on their plans.
• Another great benefit of being in a group plan is that many employers often cover part or all of the insurance premiums.
• And because an insurance company insures all employees under a group policy, there are no physical exams or health history surveys to complete, making it easier to get health insurance especially for people with pre-existing conditions. A group health policy covers people regardless of their age or present state of health.

Most Americans participate in a group health insurance policy, through their work or other organizations, as it is the least expensive kind of health insurance.

While some employers offer only one health insurance plan, others offer a choice of plans, for example, fee-for-service plans, HMO plans, or PPO plans.

Group insurance is the only way for employees to get immediate maternity coverage, unless they already have an individual health insurance policy for the minimum of a year and have already requested coverage. For a business to qualify for group health coverage, most states in the U.S. require that a company have at least two to three employees.

Group health insurance is the best possible and most affordable health coverage for employees. It ensures that all employees of a business are covered by a health policy. Even people who have been turned down for an individual health policy are eligible for a group health insurance plan.

The only real disadvantage of Group health insurance is the limitation of choice. What this means is that a group plan is tailor made for an entire group and not any particular individual. Any person enrolled in a group health care plan has no say in the type of policy, the amount of premium and deductible and maximum lifetime coverage it provides.

If you leave or quit your job, you lose your employer-supported group coverage as well. It certain cases it is possible to keep the same policy, however you will have to pay the premiums yourself.

However, a federal law called COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) makes it possible for most people to continue their group health coverage for a period of time.

The law states that if you work for a business of 20 or more employees and leave your job or are laid off, you can continue to get health coverage for at least 18 months after, but you will be charged a higher premium than when you were working. Widows with dependent children, and divorced or separated spouses with dependent children, will continue to get group health insurance for a period of three years.

Choosing group or individual health insurance however should depend on your situation. If you or one of your dependents have any special health care needs, a group policy may offer you the coverage you need. It is important that you carefully evaluate your health care situation and than make a decision to chose a group health care policy.