What You Need to Know About Group Health Insurance
What is Group Health Insurance?
Group health insurance is a policy purchased by an employer and offered to employees. As a benefit of working with that employer, eligible employees have the opportunity to be covered under that group insurance umbrella. The employee’s family could also be covered under the policy. The elements of group health insurance will vary from employer to employer, but it’s only beneficial that the employer make coverage as comprehensive and appealing as possible. Like vacation time and bonuses, the insurance package can be a deal breaker when considering employment options.
How Does It Work?
The average employee is either covered through their employer’s group health insurance policy, or through a family member’s employer policy. Employers make contributions toward the cost of the health coverage premium. On average, employers pay at least one-half, or more, of the monthly premium for each employee.
The benefits of the policy should be explained in detail to the employee upon hiring. Several times a year, this information will be reiterated. At these times, the employee may be offered the opportunity to change their policy status. This could include taking advantage of new options, or adding another family member.
Group Health Insurance: Are They All the Same?
As stated above, coverage can differ between employers, as well as between businesses and states. Big businesses and small businesses are, by law, not required to offer the same coverage. A small business is any entity with fewer than 50 employees. As a matter of law, small businesses are not required to offer health insurance at all. Still, many do so because, again, as stated, in today’s negotiations between employer and employee, the strength of group health insurance plays an important role in attracting solid talent.
Some Things You May Not Know
- Much like when looking for a personal policy, health and bad health habits play a major part in group health insurance coverage. A known smoker could be held accountable for their actions, and find themselves penalized with a higher percentage of the premium. Plenty of employers encourage good health habits, offering programs that will help smokers quit, or work with their weight, cholesterol and other health concerns.
- Companies that have fewer than 15 employees, by law, are not required to cover pregnancies. So, while hospital stays and maternity leaves are covered by most employers, there are many disgruntled people who discover too late that is not the case with their employer.
With companies that have more than 15 employees, the regulations that cover pregnancy and related conditions must be based on coverage of other medical conditions. If the company’s group health insurance plan covers private rooms, it must do the same for a pregnancy. If visits to the doctor are covered, so are visits for pre- and post-natal care.
- While most employers do offer employees the opportunity to include family members in the coverage, employers are not obligated to do so. A standard that has been growing over the years are employers not providing coverage for spouses that have insurance through their own employment. Another growing standard is employers providing less of the premium for the employee’s dependents.
- Employees are gradually paying a growing share of their policy premium, because a larger number of employers are contributing less. As a matter of fact, there’s no law that states the employer has to contribute at all. The good news is most employers are still picking up the lion’s share of group health insurance premiums.
- An employer is not necessarily obligated to include any one specific individual in its group health insurance policy. The levels of benefits can also differ between groups of employees and individual employees. There simply has to be a clear, obvious distinction. For instance, employers may not offer health plan benefits to any employee working fewer than 20 hours per week.
In the vast world of group health insurance, there are also health benefit groups that may fit your needs better than others. There’s the Preferred Provider Organizations (PPOs), Health Management Organizations (HMOs), and Point-of-Service plans (POSs). There are also the less expensive options of Health Reimbursement Accounts (HRAs), High Deductible Health Plans (HDHPs) and Health Saving Accounts (HSAs).
All these organizations are essentially structured the same way, i.e., offering managed group health insurance, but cutting costs by working with an exclusive network of health care providers with fixed rates. Each has unique approaches and criteria, so it’s a good idea to review each carefully before making a final decision.