Group Health Insurance Plans

There are many types of group health plans offered to provide health insurance coverage to employees, such as:

• A Health Maintenance Organization (HMO) is where the enrolled individual must select a primary care physician (PCP) within a select network. These individuals will typically need a referral from a PCP to see specialists but may have lower out-of-pocket costs.
• A Preferred Provider Organization (PPO), which offers greater convenience and flexibility in choosing providers. Individuals enrolled in this plan can see both in-network and out-of-network providers but generally pay less when using in-network services.

Other types of group medical insurance include an Exclusive Provider Organization (EPO) and a High Deductible Health Plans (HDHP).

Typically, at least two, including the owner. However, requirements for group health insurance for small businesses (or large businesses) may vary across carriers and states. It is best to consult with your insurance carrier to determine the number of employees required for group health insurance.  

A group health insurance plan covers specific medical expenses for you and your participating employees. Group dental, vision plans, and other voluntary insurance are offered separately.

Group health plans provide a mechanism for employers to offer employees comprehensive health coverage. Depending on the type of plan, employers can leverage the buying power of the group, negotiating better rates and plans for employees. The employer’s risk is spread out throughout the policyholders, and the cost of premiums is typically shared between the employer (plan sponsor) and the members of the plan (employees). Group health insurance can be less expensive than an individual buying in the marketplace.

Group insurance plans cover groups of two or more people, which may include an employer, two or more employees, and their families. Individual insurance is a health plan that covers a single person, with an option to add coverage for that person's eligible family members. If the business consists only of a single consultant, freelancer, or sole proprietor, individual insurance may provide necessary medical coverage in a situation where group health coverage may not be available. Individual policies can also be tailored to the individual employee's needs, and employees can shop around for their ideal individual health insurance provider instead of using one chosen by their employer.

When choosing a group health insurance plan, value and cost are among the most critical factors. While health insurance costs can be a significant item on your benefits budget, this and other employee benefits can go a long way toward attracting and retaining a quality workforce. Do your research, compare multiple insurance carriers, and look for factors such as:

• Insurance carrier options and plans offered by each
• A range of insurance plan options that provide the best balance of coverage and affordability
• Co-pay, prescription, hospitalization, and other additional options to the insurance plan (remember that the more coverage you choose, the higher the premium)

With an individual health insurance policy, a covered individual pays for 100% of their own premiums. On the other hand, employers and employees can share group health insurance costs, with employers covering some or all of the premium costs for a single employee and their spouse and dependents. The risk is also spread across more people for group health insurance policies. This can yield lower premiums.

A Health Reimbursement Arrangement or HRA plan, is an employer funded health benefit that helps employees pay for qualified medical expenses that would otherwise be paid by the employees (copay, deductible, or co-insurance), as well as dental and vision services. The terms of use for an HRA plan are determined by the employer.