What is Group Health Insurance?

Group Insurance health plans provide protection coverage to a group of members, which usually included employees of an organization. The fact that the insurer’s risk is spread across many people of the group, the group health members therefore usually receive insurance at a reduced cost

Benefits of a Group Health Insurance Plan

The main benefit of a group plan is that it spreads risk across a group of insured beings. This aids the group members by providing them low premiums, and as far as the insurers are concerned, they can manage risk better when they have a distinct knowledge of who they are actually covering. Through health maintenance organizations (HMOs), insurers can apply greater control over costs wherein the providers contract with insurers so as to provide care to the members. The HMO model inclines to keep costs low based on the flexibility of care afforded to the individuals. Though Preferred provider organizations (PPOs) charges higher premiums than HMOs, but they offer the patient better choice of doctors and much easier access to relevant specialists.

It is seen that majority of group health insurance plans are often employer-sponsored benefit plans but it is possible to buy group coverage through other organization or association. Plans offered by the American Association of Retired Persons (AARP),wholesale membership clubs, and the Freelancers Union are all the examples of such health insurance plans.

Special Considerations

There were times when people were not covered by the group health insurance plan and had to bear the expense of healthcare. With passing time, the scenario has changed. The employees that are not covered by employer-sponsored group health insurance plans are provided care by the Government-sponsored health plans.

The Affordable Care Act (ACA) of 2010 has replaced a countrywide order that each taxpayer should join a group plan as in the single payer solution thus raising the national health expenditures past 15% of gross domestic product. If government data is to be believed then the benefit of ACA health insurance is taken by around 20 million Americans

How Group Health Insurance Works

Group health insurance plans are first bought by organizations or firms, and then presented to its employees or the members. Group Health Plans can only be purchased by groups and not by individuals and these plans usually need minimum 70% participation in the plan to be lawful and valid. No two plans are ever same due to various differences in regards to the insurer, type of plan, cost of the plan and other terms and conditions

  • Since the insurer company risk is spread across a set of policyholders, group members obtain insurance at a reduced cost
  • Plans generally require minimum 70% participation in the plan in order to make it valid.
  • Premiums are divided between the company and its members. The coverage may be given to members' family and/or for an extra cost to other dependents.

Without health insurance, getting sick or injured could mean going bankrupt, going without needed care, or even dying needlessly. -Jan Schakowsky

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