Things You Need to Know About Group Health Insurance Plans
A group health insurance policy is one of the many benefits employers offer to their employees (and often the employee’s family) for working for the company. It’s a very popular employee benefit as it provides insurance coverage to more than half of the Americans.
First things first, one of the major advantages of such insurance policies is that they are purchased by the employer, and usually half or more of the required total monthly contribution comes from the employer. Similarly, most employees in the U.S. are covered under “POP” plans, or Premium Only Plans, allowing them to make their part of the contribution on a pre-tax basis.
Also, the employer’s contribution isn’t taxable for the employees, and there are also many other tax benefits for the employees covered under a POP plan. This makes these plans heavily subsidized when it comes to taxation.
Apart from that, such group insurance plans are also very affordable. Since group insurance is more about getting insurance coverage due to a common factor than a necessity, insurance companies are usually more than willing to offer plans at considerably cheaper rates than what you would get while purchasing individual plans. This makes these plans a win-win for both employees and employers.
Then there’s also a great advantage particularly for employers that encourages them to provide group insurance coverage to their employees. Offering great employee benefits to the best workers is perhaps considered one of the most effective ways of retaining the best employees. Similarly, a great group health insurance plan also attracts new talent to your company.
It also goes without saying that a better overall health of your employees means less unplanned leaves and an improved morale of workers.
Are All Such Policies the Same?
Technically speaking, no, all such policies aren’t the same. Firstly, the laws governing these policies may vary from state to state. Secondly, with the introduction of the Affordable Care Act (ACA), the federal government, too, has laid down several regulations regarding such insurance plans.
This is especially true for those who also purchase a different plan on their own, as well as those working for small companies. Basically, things tend to differ when it comes to working for a small company as compared to working for a big company.
Any company having less than 50 full-time or the “equivalent” of full-time employees is considered a small company. All the other businesses having a larger employee base are considered large employers. That being said, the laws are different for the coverage offered by both of them, and the premium tends to differ as well.
What if I Lose Access to the Group Insurance Coverage?
Millions of people who lose access to their group insurance coverage due to losing their job, divorce, or other such reasons, may still be allowed to keep their group coverage for a certain period of time. Many are even able to continue with the group coverage without any time limitations, thanks to the federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).
However, COBRA doesn’t exist in all the states (and doesn’t apply to all employers), but in some of the states it doesn’t, there are actually better options that offer more generous benefits.
Finally, you may want to be sure about how it may affect you by going through the benefit summary booklet provided by your employer.