Key Takeaways:

• Cost-Effective Coverage: Group health insurance allows businesses to provide medical coverage to employees at a lower cost per individual due to the risk being spread across a larger group.
• Enhanced Employee Benefits: Offering group health insurance can be a key factor in attracting and retaining employees, enhancing job satisfaction and loyalty by providing valuable health benefits.
• Flexibility and Variety: These plans often include options for family coverage and may extend to dental, vision, and other types of health-related insurances, giving employees a comprehensive benefits package.

What’s the definition of Group Health Insurance?

Group health insurance plans provide health coverage for members of a group. Group insurance plans are most often business health insurance plans covering employees who work for the same large company. But there are also small business health insurance plans and group medical insurance for members of labor unions, professional associations, fraternal organizations, and advocacy groups.

How Group Health Insurance works

Group health insurance plans are typically acquired by businesses and organizations to provide medical coverage to their employees or members. These plans are designed exclusively for groups and cannot be purchased by individuals. The groups eligible for group health insurance often fall into two categories: employer-employee groups, where all members work for the same entity, and affinity groups, which include individuals with a shared commonality like professional societies, fraternal organizations, or customers of the same bank. These policies typically cover employees or members, as well as their spouses and families, and are often offered as part of a benefits package or as an incentive to join a specific organization.

Individuals cannot directly enroll in group health insurance plans; only groups, such as a company’s HR department, can do so on behalf of the covered individuals. Group health insurance plans vary in terms of costs, plan types, insurance companies, and coverage details, but they usually share certain characteristics. Group members typically have the option to accept or decline coverage, with many plans requiring a minimum percentage of group members to elect coverage before issuing a policy. The cost of premiums is typically shared between the company or affinity organization and the insured individuals, and participants can often add their family members and dependents to the plan for an additional cost.

For small businesses, group medical insurance plans may require enrollment by just one employee or one full-time equivalent. Under the Affordable Care Act (ACA), businesses with fewer than 50 full-time or full-time equivalent employees are exempt from being required to offer health coverage. However, businesses with 50 or more full-time employees must provide group medical insurance to their entire workforce.

Types of Group Health Insurance plans

Group health insurance plans are a cornerstone of employee benefits, offering a range of options tailored to meet diverse needs. These plans are cost-effective for employers, spreading the risk across many participants and typically resulting in lower premium costs compared to individual policies. Understanding the different types of group health insurance can empower businesses to choose the best fit for their team’s health and financial well-being.

HMO (Health Maintenance Organization)

A Health Maintenance Organization (HMO) covers visits to physicians in-network, a limited number of physicians, and other providers who have agreed to work with and accept payment from the group health insurance plan. This arrangement typically requires members to choose a primary care physician (PCP) who becomes the main point of contact for all healthcare needs. The PCP coordinates care and provides referrals to specialists within the network, ensuring that care is managed efficiently and cost-effectively. However, it’s important to note that HMO plans generally do not cover services rendered by out-of-network providers unless it’s a true emergency, emphasizing the importance of staying within the network for all non-emergency health services.

PPO (Preferred Provider Organization)

A Preferred Provider Organization (PPO) allows the insured to choose doctors, hospitals, and other providers either inside or outside of their network. This plan is typically more expensive than an HMO but offers broader coverage and more choice, which can be crucial for those who require services from specialists not available within the network. The cost difference between using in-network and out-of-network services can be significant, with higher out-of-pocket costs for services outside the preferred network, but it allows for greater individual control over healthcare decisions.

EPO (Exclusive Provider Organization)

An Exclusive Provider Organization (EPO) plan combines elements of HMO and PPO plans, offering a managed care solution with a network of providers. Members must stick to the network for all non-emergency services, as out-of-network visits are typically not covered, similar to an HMO. However, like a PPO, EPO plans do not require referrals to see specialists, giving members the flexibility to see any provider within the network directly. This structure is ideal for those seeking a balance between cost and flexibility in managing their health care.

POS (Point of Service)

A Point of Service (POS) plan is a versatile health insurance option that combines features from both HMO and PPO plans. It requires members to select a primary care physician (PCP) who coordinates their care and provides referrals to other network providers. For services within the network, costs are generally lower, and referrals are required for specialist care. However, members also have the freedom to seek services outside the network at a higher cost without a referral, offering a mix of structured, cost-effective care with the flexibility to choose providers.

Benefits of Group Health Insurance

From the standpoint of employers and employees, or affinity groups and members, group health insurance also offers a number of advantages:

Group coverage tends to cost less

Small business health insurance coverage for companies with one to 50 employees isn’t strictly required as an employee benefit, but employees still have to get it somewhere. Group health insurance can offer lower deductibles than healthcare marketplace policies, and the monthly cost of premiums, even if employees pay most of the cost of their insurance, is lower than they can get on their own.

Group coverage spreads out the risk

Lifetime coverage limits were common before the ACA. Health insurance companies were able to exclude coverage for preexisting conditions. There are almost no cases in which lifetime coverage limits apply now. However, when insurance companies face an unsustainable level of claims, they may stop offering coverage altogether. Group coverage is more stable than coverage through individual policies, and the ability to renew the policy—which is done on the group level, not the individual level—is more reliable.

Small business health insurance offers tax benefits

Employers with two to 25 employees who offer group health coverage may be entitled to the Health Insurance Premium Tax Credit, which equals the lesser of $1,000 for individual coverage, $3,000 for family coverage, or 50% of the premiums paid.

Employees value health insurance

Most employees value health insurance coverage. Offering health insurance coverage as a benefit increases worker loyalty and reduces turnover. Most employees treat health insurance as their most important employee benefit.

Group Health Insurance eligibility and enrollment

Understanding who qualifies for group health insurance and how to enroll are crucial steps for both employers and employees in navigating the benefits landscape.

Eligibility criteria

Enrollment in a group health insurance plan typically depends on the specific requirements set by the group or organization offering the coverage. Eligibility criteria can vary widely, but they often consider factors such as:

1. Employee Status: Many group plans are offered by employers to their employees. Eligible employees usually need to work a certain number of hours or have a specific employment status, like full-time or part-time.
2. Membership in Affinity Groups: Affinity groups, such as professional organizations, alumni associations, or trade unions, may offer group health insurance to their members. Eligibility in these cases depends on belonging to the particular group.
3. Dependents: Group plans often extend coverage to spouses and dependent children of eligible individuals. The definition of “dependent” can vary but generally includes spouses and children up to a certain age.
4. Timing: Group health insurance plans often have specific enrollment periods, such as when an employee first becomes eligible or during annual open enrollment periods. Missing these windows may require waiting until the next opportunity.

It’s crucial to check with your employer or the organization offering the group plan to understand the eligibility requirements and enrollment process.

How to enroll

Enrolling in a group health insurance plan involves several steps, and it’s essential to pay attention to timing and other considerations:

1. Eligibility Check: Determine if you meet the eligibility criteria set by your employer or the organization offering the plan. Ensure that you are enrolling during the appropriate enrollment period.
2. Complete Enrollment Forms: Your employer or organization will provide enrollment forms that you need to fill out. These forms typically include personal information, details about dependents you want to cover, and your plan choices.
3. Choose a Plan: Group health insurance plans often offer various coverage options. Review the plan options available to you, considering factors like coverage levels, premiums, deductibles, and out-of-pocket costs.
4. Consider Additional Coverage: Some group plans may offer additional coverage options, such as dental, vision, or life insurance. Evaluate your needs and consider enrolling in these additional plans if they are available.
5. Timing: Be mindful of enrollment deadlines. Missing the initial enrollment period may require waiting for the next annual enrollment period or experiencing a qualifying life event, like marriage or the birth of a child.
6. Documentation: Prepare any required documentation, such as proof of eligibility, marriage certificates, or birth certificates for dependents, to ensure a smooth enrollment process.

Frequently asked questions about Group Health Insurance

What are the different kinds of Group Health Insurance?

Employers have several different options for funding group health insurance. Fully-insured plans involve the insurance company taking all of the risk for paying health insurance claims in exchange for the payment of premiums.

Self-funded plans offer lower monthly premiums, but the employer takes the responsibility for paying out catastrophic coverage. There are level-funded plans that adjust premiums every year on the basis of how many claims are filed and high-deductible health plans with savings options that you can pair with health savings accounts.

What are the differences between group insurance and individual coverage?

Group health insurance and individual coverage differ in several key ways. Group insurance, typically provided by employers, offers the benefit of lower premiums due to the risk being spread across a pool of insured members. It often requires less direct management by individuals, as employers handle plan selections and negotiations. Individual coverage, on the other hand, is chosen and managed by the individual, offering more flexibility in selecting providers and plan details, but generally at higher costs and with greater responsibility for managing the insurance process.

Can I keep my Group Health Insurance if I leave my job?

When you leave your job, you typically can’t keep your group health insurance as it’s tied to your employment. However, options like COBRA allow you to continue your group coverage for a limited period under certain conditions, albeit at a higher cost since you’d be responsible for paying the full premium. It’s essential to explore all available options to maintain coverage, such as enrolling in a spouse’s plan or securing individual insurance through the marketplace.

Find a Group Health Insurance plan with eHealth

When searching for a group health insurance plan, eHealth can be a valuable resource. We offer a wide range of group health insurance options that cater to various needs and preferences. Our platform allows you to explore available plans, compare coverage and costs, and easily enroll in the plan that suits you best. Whether you’re part of an employer-sponsored group or an affinity organization, eHealth simplifies the process of finding and enrolling in the right group health insurance plan for you and your family.

To compare quotes or to get more information about business health insurance plans, compare group health insurance plans or speak with one of our licensed insurance agents.