What Is Group Health Insurance Coverage?
Published on December 05, 2018
Group health insurance coverage explained
While group health insurance coverage does group people together with others that share something in common — often it’s because they’re all employees with the same company — their privacy and health details aren’t compromised because of it. At its core, group health insurance coverage is a plan of health insurance options that provides coverage to its members, and often their dependents, exclusively.
A significant advantage of participating in group health insurance coverage is that employees are often able to receive benefits at a lower rate than if they were purchased separately. A key reason for this reduced price is because the insurer is able to spread out its risk across a group of people rather than placing it all on one person.
Small business health insurance and group health insurance: What’s the difference?
Group health insurance is often also called small business health insurance. Businesses of all sizes often offer health insurance to their employees as a way to attract the best talent. However, small business health insurance enables those companies without huge budgets to also provide their employees with the kind of on-the-job benefits they expect. In the small business world, the terms small business health insurance and group health insurance are often used interchangeably. While such health insurance may or may not be required under the current laws, offering such a benefit helps small businesses attract and retain choice employees.
Group health insurance coverage requirements
A small business is considered to be one that has between 2 and 50 employees. In many instances, a sole proprietorship would also be considered to be a small business in the eyes of the federal government. This is because the owner/operator is typically counted as an employee. Federal law states that if a small business chooses to purchase group health insurance coverage, its availability is guaranteed regardless of any health issues the employees might have.
If a business offers of small business health insurance to its full- or part-time employees, then it must be available to all full- and part-time employees. In most cases, this health insurance coverage is also extended to the employees’ dependents. The medical conditions of any of the employees have no bearing on whether or not they can be extended health insurance benefits.
Group health insurance coverage and other types of insurance: What’s the difference?
There are distinct differences between group health insurance coverage and other types of insurance such as family and individual insurance. Small business group insurance provides coverage for both your employees and their dependents and other family members. Individual and family insurance doesn’t cover employees. In order to qualify for more attractive premium rates, it’s possible that a small business will need to be recognized as such under state law. That isn’t an issue with family and individual insurance. In both cases, there could be tax incentives and/or subsidies available that are designed to help offset the costs of such coverage.
Providing small business health insurance helps you keep your best employees and take care of them. Finding the right type of group health insurance coverage doesn’t have to be complex or time-consuming though. The eHealth website is easy to navigate and could provide you with information about health plans that aren’t available on the health exchange.