Group health insurance plans provide coverage to a group of people. The employer can be either a large company or small. Group Health Insurance plans are traditional or managed care. Health Maintenance Organization Plans, Point of Service Plans, and Preferred Provider Organization Plans are under Managed Care Plans.
Group Health Insurance Benefits
Lower Premium: As compared to individual health plans, group health insurance plans have a lower premium. The premium is dependent upon the risk profile. The greater the risk is then the higher the premium. According to the policy the premium per person is provided by the employer which will be a big help.
Additional benefits can be obtained like mental and dental care at cheaper cost when it comes to group health insurance. By the way, this is another benefit off group health insurance. Pregnancy will not be covered under group health insurance. The premium can become very expensive as compared to individual.
Pre-existing Conditions : According to the Health Insurance Portability and Accountability Act of 1996, it limits the ability of insurance companies in refusing coverage for an employee under a group health insurance plan. In addition, they are not allowed to go beyond 6-12 months of history claims. In cases of individual health insurance policies, they may deny coverage related to pre-existing conditions.
Tax Benefits: Fringe benefits are in the form of premiums. But it is not considered as part of the employee’s taxable compensation. But in cases of individual health insurance, the person has to pay premiums from his after-tax salary.
Employers get Benefits from Group Health Insurance
Tax Incentives: The premium paid by the employer for group health insurance is fully deductible, provided health insurance is offered as a part of the employee’s compensation.
According to the Consolidated Omnibus Budget Reconciliation Act (COBRA) in case a person loses his job, he can still be covered for 18 months after lay off under the former employer’s plan. Moreover, from March 1, 2009, a former employee has to pay only 35% of the premium of the policy while the remaining 65% would be covered by the Federal government.