Group insurance refers to coverage provided to a group of members as part of an employment benefits package, as opposed to individually purchased insurance. If you’ve participated in obtaining health, dental, vision, or other insurance through your workplace, you’re already acquainted with the concept of group insurance.
Approximately 50% of Americans, according to the Kaiser Family Foundation, benefit from employer-provided group insurance, which tends to be more cost-effective than individual policies due to employer contributions.
How Does Group Insurance Work?
Group insurance plans (coverage) are purchased by an organization and are provided as employee benefits.
Despite the term “group” insurance, each employee has their own policy. The difference is that the insurance provider covers a group associated with a single organization.
When a company provides group insurance as a benefit, employees can opt to enroll or decline coverage. One reason an employee may decline coverage is because they are covered by their spouse’s employer sponsored insurance, for an example.
Enrollees may have their premiums partially covered by their employer, with contributions typically deducted from their paychecks. While health insurance (major medical) is the most common type, employers may offer various group insurance plans covering accidents, illnesses, disability, or death to employees and their families. See below for common types of group insurance coverage.
For any employee who initially declines coverage later changing their minds, enrollment typically occurs only during open enrollment periods, unless a qualifying life event occurs.
What Is the Open Enrollment Period?
Open enrollment is the designated period all employees can signing up for group insurance without a qualifying life event. A few changes that may qualify as a qualifying event for an employee to make changes to their current coverage are change in legal marital status, change in the number of dependents, change in your health or spouse’s coverage due to spouse’s employment.
Employers may align this with the ACA Health Insurance Marketplace schedule, or it may occur at other times, necessitating employees to check with their employers.
How Is Group Insurance Different from Individual Insurance?
Group insurance is distinguished from individual insurance by its discounted rates through employers due to the cost of insurance being spread out across many individuals. Individual insurance, purchased independently, often comes at a higher cost.
Common Types of Group Insurance
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Health Insurance
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Dental Insurance
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Vision Insurance
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Life Insurance
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GAP Insurance
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Disability Insurance
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Accident Insurance
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Critical Illness Insurance
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Hospital Indemnity Insurance
To learn more about your company’s group insurance offerings contact your HR representative for information related to costs, enrollment procedures, and deadlines.
Advantages of group insurance can include cost savings, as premiums are shared with the employer, no examination requirements for pre-existing conditions (unlike individual insurance), and simplified enrollment managed by HR representatives.
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Lower Costs: This can be associated to employer contributions and lower premiums since the costs is spread among more people making thus lowering each individuals’ costs.
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Ease of Enrollment: Group insurance is coordinated by the employers HR department. They are the middleman to employees and the insurance agents, coordinating enrollment times/meetings for the employees. It’s recommended for employees to sit with an agent to ask questions for the most accurate information during enrollment. This allows you to make the best insurance coverage decisions for you and your family.
For more information about group insurance feel free to reach to us at (833) 672-2467 or at [email protected]
