Benefits of Group Health Insurance

Groups of people can get a group health insurance easily. It is either under a large company or a small one. Group Health Insurance can be either managed care or traditional. Managed Care Plans will include Preferred Provider Organization Plans, Point of Service Plans, or Health Maintenance Organization Plans. These are all good choices for you.

Benefits of Employees from Group Health Insurance

Lower Premium: Individual health plans cost more as compared to group health insurance. The risk profile is a determining factor. The higher the risk then the higher the premium. The premium per person is going to be less as compared to having an individual plan, if it is going to be provided by the employer.

Additional Coverage at a Cheaper Cost: This is another benefit of group health insurance. A person can get a number of additional benefits like optical care, mental and dental care at a cheaper cost because of increased purchasing power on account of buying insurance as a group. Most insurance policies do not cover the cost of pregnancy. On requesting this coverage, the premium in case of an individual health insurance policy may become very expensive.

Pre-Existing Conditions: Health Insurance Portability and Accountability Act of 1996 (HIPAA ) limits the ability of the insurance companies to refuse coverage to an employee seeking insurance under the employer's group health insurance plans. Moreover, the insurance company is not allowed to delve into more than 6-12 months of claims history. In case of individual health insurance policies, the insurance company may deny coverage on account of 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 is paid by the employer and it is fully deductible given that the health insurance offered is 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.

by Charles David Rogers