Group Health Insurance
The term group health coverage refers to insurance policies covering a specific pool of people, such as employees of a company or members of an association. These insurance plans are generally cheaper than individual policies, since the insurer’s risk is spread among the entire group and not just one person. Many employers offer group coverage as a way to attract and retain quality workers. Group health coverage is also available to retirees and the self-employed through associations such as AARP or Freelancers Union.
The majority of people who have group coverage obtain it through their employer. In the United States, group health coverage is regulated by state and federal laws. The Affordable Care Act established new rules for most of the country’s group health insurance markets. Previously, insurance companies could exclude coverage for preexisting conditions or limit the amount they would pay for expensive treatment. Today, there are no lifetime coverage limits and the ability to add dependents is a standard feature of most group health insurance plans.
Employer-sponsored group health plans are the most common form of group insurance in the USA, although some organizations and associations provide their own group insurance to their members. Typically, a master group policy is issued to the employer, and all members of the organization or affinity group are covered by it. The insurance plan may include a variety of insurance options, such as basic medical, dental, and vision. Employees have the opportunity to make changes to their supplementary insurance choices during open enrollment periods, and can usually add or remove dependents from the plan.
In addition to reducing the cost of providing healthcare for employees, offering group insurance has several other benefits for a business. For example, research shows that health coverage encourages individuals to seek preventive services and lowers overall healthcare costs. Depending on the size of your workforce, you may need to shop around for the best price on group health insurance.
Small business owners who choose to provide health insurance for their employees must follow state and federal regulations, such as ensuring that all full-time employees have access to the plan. However, most small businesses do not offer health insurance because the expense is often prohibitive, especially for firms with only a few employees.
Most states define a small group as a business with two to 50 full-time equivalent employees. The definition of small group varies from state to state, and some allow sole proprietorships with no employees to qualify. Some states have guaranteed issue, which means that the insured can’t be denied coverage due to preexisting conditions or other factors. Other states have nondiscriminatory practices for small groups, which mean that the employer must cover everyone in the same rate category regardless of their age or other factors. Nondiscriminatory practices for small groups are rare in the United States, but do exist.