Group Health Plan (Group Health Insurance)
Often times a person might get a little confused as to what the term group health insurance exactly means. This is a term that really is not that hard to understand if you have all of the facts in front of you, to begin with. Let’s take a look at this term and all of the aspects that surround it.
What Is A Group Health Plan?
The term group health plan is a term that is applied to a health plan that covers a group of people. This term is used a lot of times in the business world for employers who offer health insurance to their employees. The purpose of an employer group health insurance plan is to provide insurance to employees as well as compensation for out-of-pocket expenses that are incurred by the employee. These types of plans can and generally do also cover the employee's dependents as well.
How Do Group Health Insurance Plans Work?
There are several factors that will go into the exact amount that you will pay for employer group health insurance. The first and biggest deterring factor is the average age of your staff. The older that they are, the more that you will have to pay. If you hire and staff a younger workforce, then you will be able to get a reduced rate for your insurance plan. It is better to go with a group plan as opposed to individual insurance as your costs will actually be cheaper.
Another factor that you will have to be aware of, is the number of insurance claims that your company has had over time. The more claims that you have had, the higher the amount per month that you will have to pay. If you are a small company and are new, then you will be able to get the lowest rates for group health insurance.
The Difference Between Group Health And Individual Health Insurance
Despite what a lot of people may have heard in the past, there is a huge difference between these two types of health insurance. The biggest difference is that there is a lot less risk that the company issuing the insurance will have to worry about. As opposed to individual plans, the risk is spread out among all of the employees instead of one single person. A lot of issuers will look at this and be willing to issue a group health plan faster than they will an individual plan. Small group health insurance is a lot cheaper than having to provide insurance for each individual person.
The Pros And Cons Of Group Health Plans
There are a lot of pros and cons associated with small group health insurance and knowing these ahead of time will be a very important part of the decision-making process when you are trying to decide what type of insurance that you are going to provide for all of your employees.
Group Health Insurance Pros
One of the biggest pros to small group health plan insurance is the fact that there is a very little risk that the issuer will have to take as opposed to them issuing a group health plan on an individual basis. This helps the employer as they will not have to spend nearly as much on providing an employer group health plan for their employees. This is an advantage that they will look at and be very happy to take advantage of in order to help save some money on a yearly basis for group health insurance.
Group Health Insurance Cons
Small group health insurance has a few cons that are associated with it, but these are greatly outweighed by the advantages. One of the biggest drawbacks is the fact that this means that you as the employee will not have the ability to choose what provider you will go with for your insurance. If you prefer Blue Cross as opposed to Cigna, then you are unfortunately out of luck and have to go with what the company group health plan provides or get coverage on your own.
As you can see, there are a lot of advantages that come from the use of an employer group health plan. This will save a lot of money for the employer, lower the risks that the issuer will have to undertake with the employer group health plan and will as well save the employee money as well. You as an employer will need to make sure that you think about the advantages that come from an employer group health plan. Now that you are a little more advised about a group health plan, you can easily make an informed decision on your own regarding group health insurance.