Almost half of insured Americans get health insurance coverage through group plans provided by employers, as per 2019 Census data. However, a lot of them might not have thought about how group health insurance exactly works. If you newly started a new job and want to understand your new group coverage, or you already have group coverage and want to learn more about it, or you lost or quit your job and you are worried about losing coverage, this article can assist you in understanding the ins and outs of group health insurance.
What is group health insurance?
Group health insurance is a comprehensive and affordable umbrella policy obtainable for a group of individuals. The most common example is when an employer promotes a corporate insurance plan to their employees, who can roll it out to their parents, spouse, children, or parents-in-law. This policy covers pre-existing conditions from the first day without any waiting periods. It includes coverage for daycare treatments, common illnesses, maternity benefits, and personal accidents, among others.
How Group Health Insurance Works
Employers buy group health policies and provide coverage to their employees and dependents. Once an employer chooses a plan, employees can opt in or out of coverage, but most plans need no less than 70% of workers to participate. Insurance premiums are divided between the employer and employees.
On average, employers covered up to 83% of their employees’ self-only insurance premiums and up to about 72% of employees’ family insurance premiums in the year 2022. Employers work with insurers and brokers to choose medical plans that best suit the requirements of their workforce and their organization’s budget. The cost of the group health contrasts, but costs usually increase every year.
History of group health insurance
Group health insurance has a rich history dating back to the early 20th century. The first health plan in the U.S. was the U.S. Marine Hospital Services in the year 1798, as reported by the Bureau of Labor Statistics. Most Americans paid for their medical care before the 1940s. However, the War Labor Board exempted employer-paid health benefits when the federal government implemented wage controls during World War II to avoid inflation, which led to the demand for group coverage.
Although regulatory changes, including the introduction of the Employee Retirement Income Security Act (ERISA) in the year 1974 and the Affordable Care Act (ACA) in the year 2010, have affected employer-sponsored health benefits, group health coveragehas remained a valuable way for employers to offer health benefits to their workers.
Advantages of a Group Health Insurance Policy
Group health coverage is a win for both employees and employers, as it offers equal access to good-quality healthcare without worrying about skyrocketing medical costs.
Attract and retain top talent
When employees are happy, they are less likely to leave an organization, and the work culture is attentive to people-centric policies. Providing employee health insurance as a benefit shows that the employer cares for them and offers them a positive outlook on the organization.
Boost focus and job satisfaction
This can act as a great motivator for employees to make them happier at work and improve their job satisfaction and productivity. With a group health policy, employees don’t have to bear tedious settlements. They can direct their hospital bills via the employer for easy reimbursement.
Family coverage at zero cost
Depending on the group health plan their organization chooses, employees can add their family members, even their parents, and avail of these benefits at zero cost, boosting company goodwill.
Preventive Health Care
Most modern insurers emphasize wellness activities apart from pushing for regular health check-ups. This could range anywhere from educating employees on different aspects of health to offering them doctor consultations or exclusive discounts on health check-ups, medicines, gym memberships, and a lot more.
Features of Group Health Insurance Plans
The lists below are the main features of the group health plan, and they are as follows:
Cashless process
Cashless processes allow the insured to receive treatment at any network hospital without upfront payment, relieving employees of the financial burden of medical expenses.
Pre- and post-hospitalization
Group health plans also cover medical expenses incurred before and after hospitalization and even post-discharge.
Added health benefits
Health benefits such as OPD consultations, routine health check-ups, and mental wellness support can be offered by an organization to encourage employees to take proactive care of their health.
How to Enroll for a Group Health Insurance Plan
To enroll in a group health insurance plan provided by your employer, it is vital to ask about the enrollment deadline once you are employed. Missing this deadline may mean waiting till the yearly open enrollment period to join. Employers may also have waiting periods of about 90 days before the new employee’s health insurance kicks in, during which time there is no health care coverage or premiums to pay.
Some group health plans provide different tiers of coverage or supplemental coverage like dental, vision, and/or pharmacy. During open enrollment periods, employees can make decisions about these insurance choices offered by their employer, as well as add or remove dependents. If a major life event like marriage, the birth of a child, or a spouse’s loss of employment changes an employee’s conditions. They may be able to enroll these new dependents in their group health insurance plan outside the open enrollment period.
Frequently Asked Questions
How Many Employees Do You Need to Qualify for Group Health Insurance?
Group health insurers provide plans to companies with either one or more employees. However, the type of plans obtainable may vary according to the size of the business. For instance, UnitedHealthcare offers various plans for small businesses with 1 to 50 employees, midsize businesses with 51 to 2,999 employees, and large employers with 3,000 or more.
How Much Does Group Health Insurance Cost?
The average group health insurance policy costs around $7,500 per year for an individual, with employees paying 17% of the premium. Family coverage costs an average of approximately $21,000 annually, with an employee contribution of 27% of the premium.
What Will I Do if I Lose My Group Health Benefits?
In the event an employee loses their job, they may also lose their employer-sponsored group health insurance. Continuation coverage may be available for the employee and their dependents.
