Group Health Insurance


A group health insurance policy is a medical coverage plan provided by an employer to its employees, and many times to its employees’ family members. This is included as an essential part of employee benefit packages that employers provide to their workers. Most individuals living and working in the US have health insurance through their employer, or through the employee benefits of a family member. One of the top reasons group health insurance is so favorable to employees is due to the premium payment, which is mostly paid by the employer.

Group Health Insurance Variables

The type of coverage you get under an employer all depends on the state in which you live/work, the insurance company your employer selected, and the options your employer decides to give. Due to federal regulations, criteria for group health insurance coverage is different for large companies and small companies. All laws for health insurance are specific to the state where you live, which changes the availability of more types of plans. Some employers offer the same plan to all of their employees, and others provide a selection of several health plans.

Large employers are typically considered companies with over 50 employees, which means small employers have less than 50 employees. Small employers are not currently required by law to provide health insurance to their employees. Federal laws distinguish how large and small groups are allowed to provide health insurance, and this usually has an effect on deciding premium costs.

Sole Proprietors

If you are a self-employed business owner, you may qualify for group insurance in certain states. For more information, refer to our article on “group of one” insurance plans.

Large Group Insurance Requirements

Large employers who provide health insurance to their workers have the unfortunate possibility of being rejected as a group by an insurance company, based on the employer’s claims history. If the employer is approved to offer health insurance, no eligible employee can be denied coverage based on medical history.  All eligible employees who wish to receive health benefits must be insured, if the employer is approved by the insurance company.

It is illegal for a health insurance company to not renew a large group health plan each year, unless the employer has neglected to pay premiums, violated the contract, or committed fraud.

Small Group Insurance Requirements

Small employers may or may not provide health insurance to their employees, though it is not mandated by law. Many companies with less than 50 employees choose to provide insurance benefits on some level to attract or keep good workers. Insurance companies assess each client differently when underwriting, and can apply their own rules based on how liberal the legal limitations are on restricting or allowing coverage. This also varies based on state laws.

Certain laws apply to every state, such as HIPAA, part of which states that no employee of a small employer can be denied group insurance for having a pre-existing condition. The insurance company must guarantee issue of the group policy to all employees. There is also a law that states the insurance company must renew the same plan every year unless there has been a violation of contract or premiums have not been met.

 

Sources:

1. National Association of Health Underwriters, “Consumer Guide to Group Health Insurance”. http://www.nahu.org/consumer/GroupInsurance.cfm