What is group health insurance?
Group health insurance is not technically a type of healthcare coverage in the same vein as major medical, HMOs, and PPOs. Rather, it is a means by which health insurance providers make their plans available to groups of people and their families.
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The most common type of group health insurance is that offered by an employer, though any group with the financial resources can participate. By providing a specific type of coverage to employers, their workers, and their families, insurance companies are able to offer volume discounts in the same way any other business.
According to the National Association of Health Underwriters (and AHU), both small and large companies alike use group health insurance. They explain that a small company is typically one with 50 or fewer employees, while a large company employs more than 50 individuals. However, because insurance laws vary from one state to the next, and employer needs are different, how group policies are offered and administered through different companies is not consistent all across the board.
Does every company offer group health insurance?
Although most Americans consider health care coverage a normal part of the average worker’s total compensation package, that really isn’t the case. As of the end of 2010, the number of American companies offering their employees group healthcare coverage was just over 55%, according to statistics published by the National Conference of State Legislatures. That number is down from 61% in 2009, translating into just under 170 million Americans covered by group insurance.
Some industry experts suggest that the number of companies offering health insurance coverage for their employees will plummet once the 2010 federal healthcare regulations are fully enacted in 2014. They suggest that employers who are already cashed-strapped in a weak economy will find it cheaper to pay the penalty for not providing insurance than to continue offering coverage. In such a case, employees would be forced into a federal insurance exchange in order to maintain their health care approach. Whether this will come to fruition, remains to be seen.
Are there any federal guidelines for employers and insurance companies?
Aside from the 2010 the federal legislation, both employers and insurance companies do have some responsibilities when it comes to group insurance. For example, employers who decide to offer group health insurance must make it available to all full-time employees regardless of pre-existing conditions or any other factors. They are allowed to require an employee to work for them for one year in order to be eligible for company benefits, but any employee who is eligible for other company benefits must also be eligible for health insurance.
In terms of the insurance providers themselves, they are required by federal law to continue offering group health coverage to a company for as long as that company wants it. In other words, once a company signs on to a group plan that plan cannot be terminated except in the case of missed premiums. Otherwise, the insurance provider is required to maintain that coverage without exception.
Are there any limits on participants of group insurance plans?
Coverage limits for group insurance plans are entirely the domain of those plans themselves. Since employers have the choice between major medical, HMO, PPO, and POS plans, the range of limits and coverage is a virtually endless.
As a rule however, if you have an HMO health insurance plan from your employer it will be very similar to an HMO your friend has, as long as both plans are administered by the same insurance company. While there may be some differences between one company and the next, typical things like co-pays, provider networks, and billing systems will be pretty much the same.
In some cases, employers may seek to reduce their health care costs by customizing their group plan accordingly. For example, they may agree to higher deductibles or lower coverage limits in exchange for reduced premiums. It is this type of variation that is most noticeable among employees of different companies, which is why it is important to understand how to calculate your group health insurance premium.
What your particular insurance plan covers is largely dependent upon what your company can afford to pay for. In some cases, employers give their workers the option of picking up the costs of lower deductibles and higher coverage limits. Sometimes that’s the only way a company can afford to continue offering coverage.
If you are not eligible for group health insurance, you can search for your own health insurance rates right now by entering your ZIP code!