Group Health Insurance: What You Need to Know

Health plans offered by employers that cover a group of people is referred to as group health insurance. In such insurance plans, risks are borne by the whole group rather than individuals. It covers employees and their families. Every member in the group receives the same benefits depending on the coverage and can cost less than individual health plans. The benefits can be deducted from taxes. It can be confusing to determine the best way for you to get insurance coverage and the ideal group plan for you. The wrong plan may end up costing you more than the benefits you can accrue. It can be helpful for you to take some time to know the details of your group health insurance coverage before signing up for it.

Here are some things to consider before opting for group health insurance.

Different Plans

Your employer may offer you the option of one or multiple group health insurance coverage plans. Businesses with more than 25 employees are legally required to provide options for HMO (Health Maintenance Organizations). Other options for group health insurance can be POS (Point-of-Service), Fee-for-Service and PPO (Preferred Provider Organizations). Each type of plan offers different benefits and coverage. If you have the option to choose between one of several group plans, make sure to compare costs and benefits of each plan before signing up for one. For example, HMO offers comprehensive coverage, provides services for preventive care and involves co-pays. In POS, you can refer to doctors outside your plan but will need to pay from your own pocket if the referral doesn’t come from the doctors in your plan. Fee-for-Service plans are traditional plans with widest choice of doctors. PPO is a mix of HMO and traditional plans. Your group health insurance won’t cover you for any pre-existing health problems you have at the time of signing up for a plan. You can choose a plan based on your family’s needs (such as regular dental visits for kids) or cost of medicines that you need on a regular basis. Also consider the costs, such as for co-pays or fee for doctors in the plans. If these exceed more than what you currently pay then you can choose a different plan or even opt for individual plans. Group health insurance for individuals will only make sense when it offers the coverage you need and at the desired costs.

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Group Insurance with Small Businesses

Group health insurance plans for small businesses can be costly as employers can’t accrue the same benefits as large companies. Small group health insurance plans may also not work out for individuals as they may not cover the services you want for your family’s health requirements. In case you work part-time or with a very small company, you may not receive any group health insurance. You can try to get coverage through professional associations or labor unions.

Validity of Group Coverage in Special Circumstances

When you leave a job, you don’t necessarily need to leave your insurance with it as well. You can continue to be covered by the same plan but will need to pay for it yourself. But do note that the cost may increase and benefits may reduce. As per a Federal law, the Consolidated Omnibus Budget Reconciliation Act (COBRA), you can continue to get coverage under the same group plan for 18 months in case of job change but your premium may be higher. This is applicable only for businesses with more than 20 employees. Under the same law, spouses and children can also be covered for 18 months. After this time, they may need to consider other health plans.