Guide to Group Health Insurance
Find Cheap Health Insurance in Your Area
Group health insurance is the coverage many people get through their jobs.
Some associations like the Writers Guild of America also offer it to members. Group health plans are usually much cheaper than other types of private health insurance.
What is a group health plan?
A group health plan is most commonly a medical insurance policy an employer offers its employees. The plans are usually the cheapest insurance options if you have access to them.
Federal law requires all businesses with 50 or more full-time employees offer a health insurance plan that meets the Affordable Care Act’s minimum essential coverage standards.
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Doctor visits
- Hospital stays
- Emergency services
- Pregnancy, maternity and newborn care
- Mental health and substance use disorder services
- Prescription drugs
- Rehabilitation services and devices
- Laboratory services
- Preventive, wellness and chronic disease services
- Pediatric services
Small business owners aren’t legally required to give their workers health insurance. However, they may qualify for a small business health care tax credit if they offer insurance to their full-time employees.
Group health plans can take several different forms. For example, your work may give you a choice between an HMO or a PPO as part of its group health offerings.
Almost half of all Americans have group health insurance, mostly through their job or a family member's job. That makes it the most popular type of health insurance in the country.
Group health benefits
Employers typically pay for most of the cost of a group health plan. On average, workers cover less than a third of the bill. Many employers also bundle additional coverage options, such as dental insurance, along with their main plan.
You pay for health insurance with pre-tax dollars. This saves money and lowers your taxable income.
How does group insurance differ from individual insurance?
People normally buy group health insurance through their workplace. This usually means they pay lower rates. Individual insurance can often be expensive, and you will have to buy your policy through your state’s health insurance exchange or directly from an insurance company.
Although group health insurance plans tend to be cheaper, you have more options when shopping for individual health policies. Employers often limit their employees to just a few plan choices. Some companies only offer a single plan option.
To buy individual health insurance, usually you have to wait for the next open enrollment period to begin. Open enrollment only opens up once per year. However, when you start a new job, you can sign up for a group health plan regardless of the date.
Who can get group health insurance?
Generally speaking, only full-time workers get group health insurance. Most businesses don’t offer coverage to part-time employees, independent contractors, and retired workers.
However, you may still qualify for group health insurance even if your employer doesn't have it. For example, certain universities offer group plans to students without private health insurance.
Self-employed workers who belong to an association group like the Writers Guild of America may also have access to group membership. Nonemployer group insurance may lower your monthly insurance bill. But, it’s important to remember that you will have to pay the entire cost of your monthly insurance rate.
Frequently asked questions
What is group health insurance?
A group health plan brings together a large group of people who all buy insurance from the same company. Many businesses offer group health insurance to their employees. Some nonbusiness organizations, such as colleges and freelancing groups, also offer group health plans to their members.
How does group insurance differ from individual insurance?
You can buy group health insurance directly through an employer or membership-based organization. Individual health insurance is available through your state health exchange or a private company.
What is a group number on an insurance card?
The group number identifies the employer or organization sponsoring the health insurance plan. It gives your doctor information about your coverage details and what services are available to you. Hospitals use group numbers to help with billing.
Can a company deny plan participation?
No, the law requires that employers make health care coverage available to all eligible workers. These rules prevent businesses from discriminating against elderly employees since age affects health insurance costs.
What’s the difference between group insurance and a blanket health policy?
Unlike group insurance, a blanket health policy is not meant to offer full healthcare benefits for full-time employees. Instead, it offers accident-only coverage that’s limited to a specific purpose. For example, a college may buy blanket health insurance for its cheerleading squad.
Can you keep your group health insurance if you lose your job?
If you lose your job, you can use COBRA to keep your existing coverage while unemployed for up to 36 months. However, you have to pay the full cost of the policy during this time. This makes COBRA an expensive option in most cases.
Sources
Information about group health insurance came from Social Security Administration. Additional sources include the Kaiser Family Foundation for information about employer health care subsidies and the Department of Labor for information regarding COBRA.
Editorial note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.