Group Health Insurance
With group health insurance, a single policy covers the medical expenses
of many different people, instead of covering just one person. Unlike individual
insurance, where each person's risk potential is evaluated to determine
insurability, all eligible people can be covered by a group policy, regardless
of age or physical condition. The premium for group insurance is calculated
based on the characteristics of the group as a whole, such as average age
and degree of occupational hazard.
How do you get group health insurance?
Find out whether you are eligible
Many employers offer group health insurance as part of their employee
benefits package. Other groups that may offer insurance coverage include
churches, clubs, trade associations, chambers of commerce, and special-interest
groups.
Apply for coverage
Although your individual health is generally not evaluated when you apply
for group health insurance, you must apply during the specified eligibility
period. For employer-sponsored health insurance, this is often the first
30 days of your employment, or the first 30 days following your initial
probationary period. For associational insurance, this may be the first
30 days of your membership in the group.
If you fail to enroll during this period, the insurance company has the
right to treat you as though you were applying for individual insurance.
This means you will probably have to answer extensive health questions,
and go through a physical examination. The insurance company can then
decide whether or not to insure you.
The purpose of the eligibility period is to reduce insurance costs by
preventing people from waiting until after they discover a health problem
to sign up for coverage. Both employers and associations may also have
an open enrollment period each year, during which you may sign up for
coverage, modify your existing coverage, or add dependents to your coverage.
What are the benefits of group coverage?
You don't need a physical exam
Under a group health insurance arrangement, the insurance company agrees
to insure all members of the group, regardless of current physical condition
or health history. The only condition is that the group members must apply
for insurance within the specified eligibility period. Clearly, this is
better for those with chronic health conditions, who might be unable to
get individual insurance.
It's cheaper than individual insurance
Because only one policy is issued for the entire group, the initial cost
of establishing group coverage is lower than the cost of issuing a separate
policy to each person. Also, group insurance is somewhat less risky for
insurers than individual insurance, since the risk is spread out among
a larger number of people. Within a fairly large group, it is almost certain
that the good insurance risks will equal or exceed the bad insurance risks.
Since group insurance costs less for the insurance companies to establish
and administer, it generally costs less to purchase.
You might get a break on premiums
In many cases, your employer or association will pick up some or all of
the group insurance premium. This can make group insurance even more affordable.
What are the drawbacks to group coverage?
You can't customize your policy. In a group insurance situation, the provisions
of the policy are negotiated between the insurer and master policyowner
(usually an employer or association). You may not have the freedom to
have provisions included or excluded, and your deductible amount and co-payment
percentage are determined in advance. In some situations, however, you
may be able to choose between two or more insurance plans.
Please Note: The information contained in this Web site is provided solely
as a source of general information and resource. It is a not a statement
of contract and coverage may not apply in all areas or circumstances.
For a complete description of coverages, always read the insurance policy,
including all endorsements
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