What is Group Health Insurance?
Group health insurance is medical insurance that is offered to individuals through the company that they work for. Often the company covers the entire cost of the insurance, but on occasion, some companies do require the employee to contribute some money toward the cost. Because a company is purchasing insurance for many employees, they can get a better rate than an individual seeking health insurance may find.
What Are the Different Types of Group Health Insurance?
Group health insurance is classified according to the number of employees that are enrolled in the company’s health plan. Companies fall into one of three categories: Small group, mid-sized, and large group. The number of employees required to qualify for each group varies from state to state, but usually small group insurance is available to companies with 2 to 50 employees, mid-size group coverage is available to companies with 50 to 300 employees, and large group health insurance is available to companies with over 300 insured employees.
How Does Group Health Insurance Work?
Because individuals often find it too expensive to purchase health insurance, many companies offer group health plans to their workers. Companies are able to purchase insurance at a much lower price than individuals because they are basically buying in bulk. Some companies provide health insurance to their employees and their dependants, free of charge as a benefit of being with the company. With the rising cost of medical care and prescriptions, fewer companies are able to cover the total cost of insuring their employees. Many companies now only cover the cost of insuring the employee and the employee must pay for insurance for his or her dependants. Some companies also require the employee to cover a portion of their health insurance premiums each month.
The Benefits of Group Health Insurance
Companies that are able to provide their employees with comprehensive medical insurance find that their employee turnover rate plummets. Studies show that when workers have good medical insurance they are less likely to leave a job. Perhaps this is due to the fact that switching insurance companies often requires people to go through a waiting period in which they are not covered. People often don’t want to risk being uninsured, even if it is just for a short period of time. Many workers will even take a lesser wage if they know that their benefit package contains a great health insurance plan. When a company is able to offer its employees a good group health insurance plan, they find that employee satisfaction rises and they are able to recruit workers from a pool of better qualified applicants.
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