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Group Health Insurance – Pros and Cons

Group Health Insurance is not only limited to employers only. It can be used by any form of groups and organizations like clubs, unions, special interest groups, governments and so forth. Among the biggest advantages of a Group Health Insurance is that it offers a person with a pre-existing condition to get insured. This happens because the plan is a group policy meaning that no medical history or physical examinations come into question. In short everybody, in the group, is covered irrespective of factors that may have rendered a person uninsurable in other policies. The biggest advantage of this policy is that it is among the most affordable Insurance Policies available that covers all the sensitive medical related areas like long term care and maternity coverage. Being that the cover is relatively cheap, many employers pay for all or part of the Insurance Premiums for their employees every month. These contributions towards this insurance policy are not taxed by the federal government. Incase your employer pays you directly for health insurance, this amount is taxed since you may choose to use it for unrelated needs or wants. Group Health Insurance provides the only means for an employee without individual health insurance to get instant maternity coverage. One can be enrolled in a group insurance once they are employed or may choose to join or switch plans during the open enrollment period. This window usually occurs once a year but may be side stepped in the event of an unavoidable situation like death, divorce or birth of a child. What makes Group Health Insurance cheap is the economy of scale. In terms of insurance, this means that they have fixed rates of services stretched over numerous policies. In short the cost of dealing with one policy affects many people therefore, no waste of time or money is present as compared to dealing with an individual insurance policy.

Being that a Group Health Insurance policy is tailor made for a group, it restricts the choice of services for an individual. This is the biggest disadvantage of this particular insurance policy. The usual freedoms enjoyed in an individual plan like premium, and deductible rate, type of policy and maximum lifetime coverage are not available here. In this policy, they use the “one plan fits all” kind of thinking. In the end, you will have to be contented with whichever doctors or hospitals listed in the plan despite your wishes and desires. Another bone of contention when it comes to Group Health Insurance is the amount of premium payable. This is because to reduce expenses most employers will go for the plan with the lowest premium with a fixed amount for each employee. This means that if they get the cheapest plan, the employee may get it without any deductions on the salary, but if it is a bit more expensive, then 100 percent of the incremental premium will be deducted from the employee’s salary. Check on the insurance brokers available by entering your Zip above and ask as many questions about your Group Insurance coverage.