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What are the basics of group health insurance?

Dr. Michael Roizen, MD
Internal Medicine
Group health insurance is usually offered by employers, associations, unions, and other organizations that bring together groups of members. Group health insurance can vary quite a bit. Sometimes you will even have a choice of plans. Employers usually pay at least part of your premium. But if your group coverage is through an organization, you’ll have to pay for the premium yourself. It’s still worth it, though, because premiums in group plans are less expensive than premiums for individuals.
Most people younger than 65 have medical coverage through their employers' group insurance.

In 2005, says the National Coalition on Health Care, over 80 percent of workers were eligible for employer-group insurance, with 83 percent of those who were offered choosing such a plan. That's because employers and other organizations typically get better rates since they have a large number of people to cover. The insurer considers it a good risk because it will pay out very little for many people in the group, yet will collect premiums from everyone. This tends to result in premiums that are much lower than those found in individual plans and are the same price for everyone in the group, regardless of their health.

The law doesn't require employers to provide health insurance, but finding good employees has historically been difficult if they don't. Also, once group insurance is offered, it falls under the protection granted under the Health Insurance Portability and Accountability Act. Its regulations protect employees by ensuring that everyone has access to the employer's health insurance plan regardless of health status. The act also helps regulate health-plan waiting periods to help achieve continuous coverage for most employees and helps ensure that workers have access to health care if they lose their jobs.

Because insurance rates are re-negotiated annually based on the previous year's health care costs, some employers offer wellness programs. By keeping employees healthier, they can lower medical costs. Participation in these programs can make employees eligible for reduced insurance premiums.

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Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.