Group Insurance
Group insurance covers a group of people, usually who are employees of a common employer, members of societies, or professionals in a common group. It is considered to be an added benefit to belonging to that particular company or group and can help attract and retain valuable members.
A feature which is sometimes common in group insurance, especially large groups, is that the premium cost on an individual basis may not be risk-based. Instead it is the same amount for all the insured persons in the group. So, for example, often all employees of an employer receiving health insurance coverage pay the same premium amount for the same coverage regardless of their age or other factors. In contrast, under private individual health insurance coverage in the U.S., different insured persons will pay different premium amounts for the same coverage based on their age, location, pre-existing conditions, etc.
- Cannot deny coverage due to age, sex, or pre-existing medical conditions
- Employer contributions are generally not taxed (as well as employee contributions)
- Can be less expensive than Individual plans if the group is large enough
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- Must offer the plan to all eligible employees (must be W2 Full-time)
- Depending on the carrier, usually 70-75% of employees must accept the group coverage
- Plan Flexibility is Limited(some plans may not be right for all employees)
- Group plans are typically not portable (when you leave the company you lose your coverage)
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