group health insurance

Health insurance is one thing that every individual – young and old alike – has to possess. Health insurance is a necessity because health is wealth and a person in a poor financial state, has little or no chance at productivity. Health insurance usually covers things like pills, generational sicknesses, unplanned health hazards and many more; all depending on the form of contract entered into. In entering into this form of insurance, people can choose whether to enter into a policy that covers their entire family, just them, or simply sign up for group health insurance with specific parties. A group health insurance policy is purchased by an employer (or employee organization) and is offered to eligible participants, and sometimes to the eligible dependents of the participants.

According to Wikipedia, group insurance is an insurance that covers a defined group of people, for example the members of a society or professional association, or the employees of a particular employer. In the same realm, a group health insurance plan is an insurance plan that provides healthcare coverage to a select group of people. They could be members of a community, employees of a particular organization, alumni of an institution, members of an association, etc. The plans are generally uniform in nature. They offer the same benefits to all employees or members of the group and the risk is spread over the entire group as oppose to one person. There are various benefits of opting for a group health insurance scheme over doing it individually. There are benefits to the employees and there are benefits to the employers. Here are some of them.

  • You protect your business

As an employer, there are various benefits of using a group health insurance policy for your staff. One of this is security – the ability to protect your general staff. When you have a group health insurance in place, you can rest assured that you would be covered and your employee(s) would be better in little or no time. This is a very vital reason to use group health insurance in the running of your company. Since your employees are the main drivers of your establishment, their inactivity can completely run your organization to the ground. Rather than run helter-skelter, raising funds for hospital care and being worried about being sued for negligence, your group health insurance is in place leaving you to focus on more important stuff.

  • Employee/Employer contribution

One basic advantage of a group health insurance to the employees is the contributions employers make toward the cost of monthly premiums. In this case, both employers and employees bear the cost as oppose to only the individual employee paying on his/her own. In other words, it is cheaper for the employee to have a good and reliable health insurance policy. According to the National Association of Health Underwriters, employers provide group health plans and pay half or more of premium costs to attract and retain talented employees. Generally, group health plans yield significant tax savings. The employer has the duty of finding the insurance provider, paying premiums as at when due, and providing employees with information about the plan. The same goes for other types of group health insurance providers. Communities, societies, homes for senior citizens and the likes, get to split the cost of the health insurance.

  • Coverage is steadily renewed

Since the business, organization, or society is responsible for the paying of the premiums, chances of default is usually very low. Most organizations pay up before it is due in order to prevent lapses in the coverage. The case of forgetting to pay premiums, unnecessary delays in payments, spending of the funds set aside for it and other issues that comes up when individuals have to pay themselves, will be completely eliminated. Since the payment is consistent and guaranteed, your security is ensured. You do not have the opportunity to take chances with your health through a group health insurance scheme.

  • Risk is spread over the entire group

This can be viewed in two ways. First, the cost per head is usually cheaper when using a group health insurance policy and, hence, you get to pay less. Paying premiums is a form of risk on its own because in reality you may not really have a need for it. So this risk is spread across and since it is cheaper, you have less to pay. Next, with group health insurance, the risk is spread over the company. That is, the more the number of participants covered, the less you have to pay as an employer. This usually comes to play as a result of the higher economies of scale that you enjoy. So whichever side you are on, you enjoy the reduction in risk of the health insurance. Definitely one of the best merits of having a group health insurance policy over an individual health insurance policy.

  • Other Services

By using a group health insurance policy, you qualify as one big client for the insurance provider. As such, they would do as much as they can to keep you. Many of them offer different extra services. These after services range from consultancy services, fast and immediate customer service 24/7, additional benefits, and so on. Some good group health insurance providers would go as far as stating the additional benefits you would enjoy by choosing them. These other services would keep you and your covered family members getting extra attention and ultimately enjoying your group health insurance experience.

Various companies offer group health insurance services including Health Maintenance Organization (HMO) and a Preferred provider organization (PPO). They range from dental services, to hospital admission, to surgical benefits and many more. In order to understand the terms surrounding your group health insurance plan, you can meet your employer or group head to properly clarify you on the entire coverage plan. Most private sector group health plans are covered by the Employee Retirement Income Security Act (ERISA) so as long as the standards are followed, you would generally be fine.

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