What is group health insurance and what are its benefits?

What is group health insurance and what are its benefits?

Reports reveal the fact that about 60% people receive health insurance coverage through group health insurance plans that are employer sponsored. Moreover, some employees feel that such health coverage is one of the major benefits that they get from their job. Read this article to acquire knowledge about group health insurance coverage.

Group health insurance – What does it mean?

As already mentioned, you can get group health insurance coverage through your employer. One of the prime benefits of opting for this coverage is the cost. The premium cost is relatively lesser in comparison to what you have to pay if you go for individual health coverage. This is because, in group health coverage, the ‘risk’ is spread across the group. What happens is, the healthy persons in the group actually subsidize the persons who have certain health related problems. So, you receive coverage at relatively low cost. Moreover, if you belong to a group of young and healthy individuals, then your premium cost may reduce further even if you have health problems.

Group health insurance – What are its benefits?

Apart from paying a relatively low cost for your health coverage, another important benefit of a group health insurance policy is that the insurer cannot reject your policy even if you have health problems. However, your employer may select certain type of coverage and benefits that in turn, affect the premium rate of your policy. Do you know that in some states, even the self-employed people can purchase such group health coverage as a ‘group of one’? Yes, it is true. However, a small group is usually defined as a group of people not exceeding 50 members.

Group health insurance is benefiting for the employers, too. Researches reveal that many employees don’t want to leave a company simply because they want to continue receive the group health coverage. They continue to work even if their wages are low in comparison to other companies. So, the prime reasons for offering group health coverage are to attract qualified employers as well as reduce the turn-over rate to some extent.

You can continue receiving group health insurance benefits even if you’re laid off. COBRA (Consolidated Budget Reconciliation Act), the federal program, allows you to continue receiving benefits of your group health plan for as long as 18 months after you’re laid off from a job. In some cases, your spouse and your dependent children are also eligible to receive COBRA benefits for about 3 years of time.