What is Group Health Insurance?
Group health insurance is a policy purchased by a company to offer to their employees as one of the benefits of employment. Group health insurance can also be offered by professional associations, trade groups, and unions to their members. These plans cannot be purchased by individuals. The employer or administration typically pays for, or “sponsors,” a portion of the insurance premium.
An employer may choose to offer a single plan option or tiered plans ranging from basic coverage to more robust coverage with add-ons. The employer may also extend coverage to the employee’s immediate family. Companies with over 50 full-time equivalent employees are federally mandated to offer affordable minimal essential health insurance coverage, but many smaller companies offer it as well.
Who is Eligible for Group Health Insurance?
The following individuals may be eligible for coverage under an employer’s group health plan:
- Full-time employees: Those who work at least 30 hours per week are considered full-time and are eligible if the employer offers health insurance coverage. The employer may require a waiting period for new employees before they can enroll.
- Part-time employees: Some employers extend coverage to their part-time workforce, based on other eligibility criteria including hours worked.
- Spouses: The employee’s husband or wife is allowed coverage under their plan. Some employers may require documentation, such as a marriage certificate. Usually it doesn’t matter whether or not they are claimed as a tax dependent.
- Domestic partners: Many employers now extend eligibility to non-married partners who reside with the covered employee. Additional requirements may apply.
- Children under age 26: Dependent children of a covered employee must be offered coverage under the employee’s plan. Adult children under age 26 are also eligible for inclusion, even if they are not tax dependents or don’t live with their parents.
- Dependent adults: An adult family member (such as an elderly parent or special-needs relative) who is financially dependent on a covered employee may be eligible under certain circumstances.
- Former employees: For a limited time (usually up to 18 months) after leaving a company, COBRA plans allow former employees to keep their existing group plan, but they must bear the full premium cost. Some employers even extend group insurance eligibility to retirees.
It’s important to note that while the employer may pay for some or all of the premium for the enrolled employee, there is no legal requirement to pay the premium for family members.
What are the Advantages of Group Health Insurance for Employers and Employees?
Group health insurance is the most familiar way to provide protection for employed individuals and their families, and it offers many incentives for both employers and employees.
Advantages for Employers
- Attracting and retaining quality employees
- Ensured wellness of your workforce with fewer sick days
- Increased productivity
- Business tax deductions
- Compliance with federal law
Advantages for Employees
- Improved job satisfaction
- Affordable healthcare
- Large networks with comprehensive coverage
- Premiums paid pre-tax, reducing taxable income
Group insurance plans are typically more affordable than individual plans, because the premium costs are subsidized by the employer and the claims risk is shared among all members in the group’s plan. Choosing a plan with a high deductible and low premium further helps minimize the monthly expense.
Various plans are available to best meet the needs of the employee and his or her family, such as HMO plans, PPO plans, and high-deductible plans. Healthcare options are robust, often with large provider networks and uncapped visits to in-network specialists. Additionally, some employers offer benefits such as dental plans, vision plans, and Health Savings Account contributions.
Group health insurance plans are flexible. For an added cost, enrolled employees can add a spouse, domestic partner, or their children to their plan.
Who Pays for Group Health Insurance?
Group health insurance plans allow the cost to be split between the employer and all employees under the plan. Here are the possible scenarios:
- The employer pays the entire premium for the employee.
- The employee pays a portion of the premium, while the employer pays the rest.
Before enrolling in a health plan, an employee can check with their employer or HR department to calculate what the employer contribution and employee responsibility amounts will be.
How Do I Compare Different Plans Offered?
When comparing health plan options, consider the premiums (monthly payment), deductibles (the amount you pay before your insurance applies), and copays (the amount you pay for services). You should also compare coverage offered for prescriptions, mental health care, and other services that apply to you.
Finally, make sure that the providers in the network fit your needs. Are they located nearby? Do they have appointments available when you need them? Do they offer the services you need? If you already have a doctor you like, verify that they are in your plan’s network.
Group Health Plans vs. Individual Health Plans
Group health plans offer some benefits that are not available with an individual health plan, such as low-cost premiums and smaller deductibles. However, while group plans are usually more cost-effective, they can limit those on the plan to using certain providers and have less flexibility for coverage. Everyone should weigh the pros and cons when deciding whether to enroll in their employer’s group plan or to look elsewhere for health coverage. For those who cannot get group health insurance, they can purchase an individual health plan instead.
How LEB Can Help
If you’re like most employers, you want to offer the best healthcare options for your employees and yourself. Whether it’s a desire to be a workplace hero or just to make everyone healthier, we’re here to help. It’s quick and easy to get a group health insurance quote online. We have plans that are tailored for groups of all sizes, and we can suggest the right plan for your company. Here’s how LEB Insurance Group can provide better benefits for your employees:
- Multiple carriers to choose from
- Real-person contact for all questions
- Personalized employee benefit booklets
- Quick and easy enrollment with your company’s own enrollment website
- Dedicated broker and advocate on your side
Learn more about group health insurance today and see how we can help keep your employees healthy!
