How Does Group Health Insurance Work?

By Robert Fredricks Posted in Health Insurance News



What Group Health Insurance Can Do For You

Group health insurance coverage is an insurance policy that is purchased by an employer and is offered to eligible employees and to their family members. This is often considered as one of the employee benefits for working for that specific company. Most individuals in this country have group health insurance coverage through their employer or are covered through a family member policy plan.

Most people do not realize health insurance is issued in a different way for different types of employers. The laws about how the health insurance coverage can be issued to large groups are different than those for small groups, and the way premium rates are considered is different.

Group health insurance will, for the most part, costs less money than other health insurance plans because of the fact there are a “group” of people participating in the plan. You may also be able to qualify for better health services since you are on a group plan as well. A group health insurance plan may be the best plan you and your family can chose because of the low costs of the premium policy.

Let’s Talk Benefits And Disadvantages

In some states, employer health insurance companies offering group health insurance are permitted to look back at an individual’s medical history for any pre-existing conditions and may decide not to cover certain “conditions.” By electing to do this, it is known as an exclusionary, or a pre-existing condition, waiting period.

Federal law states that small group health insurance companies may impose no more than a six-month look-back/12-month exclusionary period for pre-existing conditions, but individual states can reduce these time periods.

All in all, when covered under a group plan, the costs are spread throughout the plan and some of the disadvantages of independent coverage may become beneficial under the group plan. As with any purchase, an employee and their family members need to do research on what is being offered to them and their families.

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