Group health insurance refers to a single policy issued to a group rather than an individual. In a business setting, this generally includes eligible employees or members of the same operation or organization. Insuring members as a group saves both employers and employees money on premiums, deductibles and similar expenses. A group health insurance plan can also be an attractive addition to an employee benefits package.
How Group Health Insurance Works
Many businesses choose to purchase group health insurance to provide employees or members with essential medical coverage. Only groups can enroll in a group health insurance plan, and most require at least a 70 percent participation rate.
Employees have the choice of whether they want to enroll in the program or decline coverage. The cost of group health insurance is typically shared between the business and its employees. Many insurance plans allow family members and dependents to be added to the plan for an additional cost.
According to the Affordable Care Act (ACA), small businesses with fewer than 50 full-time or full-time equivalent employees are not legally required to provide workers with health insurance.
However, larger organizations with more than 50 full-time or full-time equivalent employees must offer insurance coverage to their staff. Money paid towards monthly premiums for employees is usually tax-deductible for employers.
Employees can also reduce their taxable income as premiums are typically paid with pre-tax dollars. Some small businesses may also be eligible for a small business tax credit.
Features of Group Health Insurance
Choosing a policy can be tricky. It is important to carefully review the features of each plan to determine which best suits the business’s needs. Some of the most common features to look for include the following:
Having access to cashless hospitalization prevents employees from dealing with meticulous paperwork after receiving certain healthcare services. If an insured member receives treatment at a hospital in the plan’s insurance network, the insurance allows for the cashless settlement of claims. This means that the insurer can pay the hospital directly for any expenses.
Coverage for Dependents
Before the introduction of the ACA, health plans could remove adult children from their parents’ coverage due to age, regardless if the adult child was a student or living at home.
Health plans are now required to extend dependent child coverage up to 26, whether or not the child is married. Group health insurance follows this rule by providing coverage for both members and their dependents, including spouses, children and even parents.
Pre- and Post-Hospitalization Charges
When the insured undergoes medical testing before hospitalization, it is referred to as pre-hospitalization charges. This may include tests like urine tests, blood tests or X-rays used for diagnosis purposes. Once the patient is discharged, further testing may be required to assess the patient’s ongoing health.
These post-hospitalization charges may include diagnostic charges, medication costs or consulting fees. Group health insurance generally covers both pre-and post-hospitalization charges.
No Exclusions Due to Preexisting Conditions
Under current federal law, companies cannot refuse coverage to an employee or charge a business more because an employee has a “pre-existing condition,” meaning a health problem that existed before the new health coverage began.
Individual health insurance policies, on the other hand, can occasionally have these exclusions. The pre-existing coverage rule does not apply to grandfathered individual health insurance plans where coverage started on or before March 23, 2010.
Better Benefits Compared to Individual Health Plans
In many cases, group health insurance offers more thorough and comprehensive coverage compared to individual health insurance plans. With group health insurance, the amount of risk to the insurance company is shared among a group of people rather than one individual or family.
This shared risk generally results in lower deductibles and more favorable copayment options. Employers also have the option to add vision and dental coverage if it is not included in the basic plan. Discounts may also be available for family members, helping to cut the costs of healthcare services.
Large Provider Network
Most plans require employees to see a provider that is in-network. A provider network is made up of a list of healthcare providers, facilities and pharmacies that have contracted with the insurance companies to offer services to members at an agreed-upon cost.
These policies generally have the largest available provider networks, allowing employees to choose from a greater range of health care professionals.
Work With New City For Group Health Insurance
Group health insurance is often the most convenient and cost-effective option for businesses and their employees. Most policies are affordable for workers and their families, and employers can enjoy annual tax savings.
Offering a group health insurance plan is also an excellent way for businesses to attract quality talent and retain loyal employees.
To learn more about the features or to speak with an insurance professional about acquiring a healthcare policy, reach out to the insurance experts at New City Insurance.