What Is a Group Health Insurance Plan?
This type of healthcare plan is built for multiple people. If you have employees that you need to cover, group insurance may be for you. Group health members usually receive insurance at a reduced cost because the insurer’s risk is spread across a group of policyholders.
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How Group Insurance Works
Your company can purchase a group health insurance plan to offer to its members or employees. Because there are many different types of plans, with so much variance it is unlikely for any two plans to be the same. Our experts are willing to help you choose coverage that makes the most sense for your company.
Once you choose a plan, group members either accept or decline coverage. Some plans come with a choice between basic coverage or advanced with add-ons depending on what the employee requires. The company and the employees split the cost of the coverage with the employer paying the majority of the premium. Health insurance coverage can also be extended to immediate family and/or other dependents of your employees for an extra cost.
Because more people buy into the plan the entire cost is usually more affordable than several individual policies.
The primary advantage of a group plan is that it spreads risk across a pool of insured individuals. This benefits the group members by keeping premiums low, and insurers can better manage risk when they have a clearer idea of who they are covering. Insurers can exert even greater control over costs through HMOs, in which providers contract with insurers to provide care to members. The HMO model tends to keep costs low, at the cost of restrictions on the flexibility of care afforded to individuals. Preferred provider organizations (PPOs) offer the patient greater choice of doctors and easier access to specialists but tend to charge higher premiums than HMOs.