Group health insurance is an excellent way for companies to provide their employees with peace of mind. Group health also usually has lower premiums than individual plans because more than one person shares the cost as it’s divided amongst the company. For many, this makes group health insurance a better option than individual health insurance.
How Does Group Health Work?
Group health plans are purchased by companies and organizations so their employees or members can enjoy the benefits of affordable health coverage. Plans must be purchased in groups, which means that individuals cannot join these types of policies themselves. Group health plans typically require at least 70% participation for the plan to be valid.
Once the employer or organization chooses a plan, group members have an option of declining or accepting coverage. Plans may also come in tiers, which will allow members to choose between receiving basic coverage or advanced coverage that can include add-ons. Group health coverage may also include coverage for dependents and family members for an extra cost.
Benefits of Group Health Insurance
The biggest benefit of group health insurance is the low premiums. The coverage and risk are spread across multiple individuals, which in return, keeps premiums low and gives insurers a clear idea of who they are covering.
Individual vs. Group Health
Since individual health insurance is designed to cover only a single insured person rather than the coverage and premiums being spread out across a group, the premiums for individual health plans are more expensive than group health.
On the other hand, though, individual health plans are also portable. This means they are not dependent on your employment status whereas if you have a group health plan through your employer but are no longer employed there, you could lose your group health coverage.
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