What is a Group Medical Insurance Plan?
Employers Resource helps every business at all stages with growth and development. Find out about our Group Medical Insurance Plan and much more! Call us today at (800) 559-2350.
A Group Medical Insurance Plan provides health care coverage to a specific group of people. These plans are one of the biggest benefits that many employers offer, are uniform in nature and offer the same benefits to all the members/employees in the groups. This insurance covers a group of people that are generally employees of a specific employer, members of societies or professionals in any common group.
A Pool of People
Group Medical Insurance helps reduce the problem of any adverse selection as it creates a pool of people that are eligible to buy insurance; these people also belong to the group for any reasons apart from the purpose of obtaining insurance. With reference to small businesses, it is offered as a component of a larger employer/membership-benefit package.
By buying coverage via a provider on a group basis for all its members, this coverage costs every individual member/worker much less compared to what they would have paid for an individual policy. Individuals who opt for Group Medical Insurance coverage get a “certificate of credible coverage”. This has to be provided to a subsequent insurance company in case the person leaves the company/organization & terminates his/her coverage.
Characteristics of Group Health Insurance
- There has to be a group of people that have to be insured. they must have something in common apart from the purpose of obtaining insurance
- There has to be a Master Policy Holder( business owner), who retains the contract on behalf of the employees/members of the group
- Typically, these covers are available at a discount compared to individual rates
- One feature that may be sometimes common in Group Health Insurance is that the premium-cost on an individual basis isn’t individually risk-based. The amount is the same for all the members of that group. For example, all employees of a particular employer receiving health insurance coverage pay the exact same premium-amount for coverage regardless of how old they are/other factors
- This is a definite benefit for the employees as under private individual-health insurance coverage, as the insured individuals pay varying premium amounts for that same coverage. It is based on their age, pre-existing conditions, location, etc
- Group plans are attractive to employees because the average-price per policy tends to be lower
- Under group insurance an employee generally remains covered as long as he/ she continues working for a specific employer & pays all the insurance premiums
Other Factors to Consider
Individual coverage is different in that the insurance company typically has the right not to renew the health insurance policy when his/her policy is up for renewal. This might occur because the risk profile of the person changes. There are a number of rules and regulations that surround both Group Medical Insurance as well as Individual insurance and as a business owner, it is important that you consult an Insurance company advisor or broker before you get any health cover for your employees.
Employers Resource helps every business at all stages with growth and development. Find out more! Call us today at (800) 559-2350.
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