Index | Health Insurance | Group Health Insurance
Group Health Insurance
Most Americans get their Health Insurance through their jobs or through their family member's employer. For the most part, Group Health Insurance is considered a better choice than Individual Health Insurance, since it normally costs less and offers more benefits to its carriers. You can have quite a significant discount on premiums and enjoy comprehensive policies being a part of a group health plan. The employer pays part or all of the insurance costs.
Group Health Insurance coverage is purchased by an employer and offered to eligible employees of the company and often to their family members (their dependents). An "eligible employee" is the one who works on a permanent basis having a 30-hour work week. Employers are not mandated to provide health insurance for their employees, however most businesses offer insurance to their workers due to their wise business practice and rules of contemporary market. Most employers realize the importance of attracting and retaining their best employees as it predetermines the success in business.
Group Health Insurance helps employees manage their health care expenses, such as regular medical exams, preventative care and prescriptions, and also lessen the costs associated with some serious illness or injury.
Some employers provide their workers only with one health insurance plan while some offer a choice of Group Health Insurance options, the most common of which are:
— Traditional, or Fee for Service Plan (FFS)
— Health Maintenance Organization (HMO)
— Preferred Provider Organization (PPO)
The laws concerning Group Health Insurance vary on a state-by-state basis. For instance, there is a difference in the way coverage can be issued for large groups (over 50 employees) and small groups (50 employees or less). Small group health insurance contracts have to be offered on a guaranteed-issue basis. At the same time, an entire large employer group may be rejected by health insurance company depending on the group's claims history. However, if an insurance company issues a policy to a large employer, then all of its eligible employees must be issued coverage with no exclusions due to individual's medical history.
Unless there are cases of non-payment of premium, fraud, or failure of the employer to comply with the terms of the health insurance contract, all Group Insurance contracts ought to be renewed annually.
With Group Health Insurance, the participating members get insurance certificates which serve as insurance policies. Group insurance may include special types of coverage that are usually very expensive if you purchase them on an individual basis.
For many small employers, health insurance is a costly problem. In 38 states, small group health insurance companies are allowed to use medical underwriting. In other states small group health insurance companies use community rating processes to determine their initial rates. When small group plans are medically underwritten, employees who apply for coverage should provide health information about themselves and their covered family members. Insurance companies use this medical information when determining initial premium rates.
If you work for a small business or work part-time, your company may not fall into 47% of small businesses that offer their employees health insurance coverage. In this case you may try to get Group Insurance through membership in a professional association, labor union, or other organization.
If you or your family member leaves the job, you will lose your employer-supported group health benefits. In case you want to keep the same policy, you will have to pay for it more and perhaps you will even have less protection. There is no "grace period" during which your former employer will extend your benefits beyond after the day you stopped working.
However, most people are able to continue their Group Health coverage with a help of a federal plan called COBRA (Consolidated Omnibus Reconciliation Act of 1985) or HIPAA (Health Insurance Portability and Accountability Act), another federal law offering protection to workers who experience a short-term lapse in their health coverage.
COBRA can provide you with at least 18 months health coverage in case you have worked for a business of 20 or more employees and left your job or was dismissed. Expect to be charged a higher premium than when you were still working.
COBRA will also cover you in a number of other circumstances. For example, if you are widowed or divorced, COBRA can provide you with health insurance in case your spouse was covered. If you were covered under your parents' group health plan while in school, you can use a chance to continue under COBRA plan for up to 18 months until you find a job and get your own health insurance.