Group health insurance plans provide comprehensive health benefits coverage to a group and are typically provided by employers to employees or members of an organization. This type of plan enables the employer to pay the premiums for his employees. Such health plans are not limited to the employees only; in some cases, they can also be extended to the employees' family members.
However, the advantage of group health insurance is that the cost of such plans is significantly lower than that of individual insurance plans, and it also allows the employer to save tax, which benefits both the employee and the employer.
How does group health insurance work?
Companies purchase group health insurance plans to provide medical benefits to their employees or members. Such plans only allow a group of people to enter.
All group health insurance plans are unique in their own way, with unique characteristics and specifications. A company or organization will typically approach an insurance provider to obtain coverage for a health insurance plan for its employees, with the company paying the premium.
Group health insurance helps the employees in many ways.
- Financially help them in medical emergencies: When a middle-class person has a medical emergency, it is normal for it to cost a few lakhs, and in such a case, a group insurance policy for employees protecting them from treatment costs can do a lot better for them.
- Increase Employee Engagement: Employees will be more focused and engaged in the company's well-being if they feel safer and satisfied that their health is being cared for by the company.
- Enhance the motivation of employees: Numerous employees experience stress as a result of financial pressures and other professional and personal issues, which can lead to decreased productivity at work. A good group insurance policy for employees will boost their motivation by providing them with a sense of their well-being with the right support.
Types of group health insurance plans
There are mainly two types of group health insurance plans available:
- Formal groups
They are also known as employer-employee groups, and consist of individuals who work for the same employer. This type of formal group typically includes a company, organizations, and businesses.
- Informal groups
If we are talking about a society or a cultural organization, the insurance for such groups falls under the category of informal groups. In such cases, a group owner purchases the health insurance policy on behalf of the group members.
Features of group insurance plans
A great group health insurance plan has many good features like:
- Group-oriented: Any organization that purchases group health plans for its members must have as few as two people in the group. Such plans are not available to single people.
- Cost-effective It is less expensive than individual participation because there are more people involved. Let's put it this way: fewer people means higher risk, but more people means lower risk, which means less money to insure a group. As a result, if a large number of people enrol in such plans, the cost of the plans decreases.
- Premium shared by the Employer: The employer pays the entire premium and provides it to employees as medical benefits.
The benefits of group health insurance
- Low Risk: Risk is spread across a large number of people in such plans, allowing members to keep premiums low and competitive. This also tells that the benefits will be the same for all group members.
- Wider Accessibility: It can include any type of group, whether formal groups made up of employers and employees or informal groups made up of a variety of individuals.
- Assistance: It allows anyone to pay the premium, whether it is a group or an individual.
- Low premium: Premiums are lower than for an individual plan for a member.
Q1. What is a group health insurance policy?
Ans.Group health insurance is a type of health insurance that covers a group of people who work for the same company.
Q2. Am I eligible for group health insurance benefits?
- There is no such condition on how many people are allowed in a group, but certain plans require a minimum of 10 people in the groups.
- The minimum age is 18 years old, and the maximum age ranges from 60 to 80 years old, depending on the plan and company.
- All members of the group should be involved.
Q3. Do I need a separate health insurance policy if I am covered by my group health insurance policy?
Ans. Yes, the group health insurance policy is only valid for the limited duration of your employment. Because your policy will expire the moment you leave your organization, you must have a personal health policy.