Group Health insurance is similar in form to individual health insurance.
The primary differences are the conditions under which a person may apply and the requirements for acceptance. Before applying through a group, a person must satisfy the waiting periods and employment requirements of the group. However, once an application can be made, the conditions for acceptance are usually less strict than with an individual health insurance policy. Also, certain protections under the law are available for members of group policies that are not available to owners of individual plans.
Not a Guarantee
Group Health insurance is not necessarily a guarantee of coverage. There are many rules, set forth by federal and state law, which must be followed closely in order to obtain coverage.
Purchasing Group Health Insurance
The first step in choosing a group health insurance policy is to find a good broker. A broker is a salesperson who has a state license to sell and service contracts of multiple health plans or insurers.
A broker is considered to be an agent of the buyer, not the health plan or insurer. The majority of group health insurance is "written", or sold, by brokers who are self-employed or work for an independent agency.
These independent brokers typically offer products from five to 15 insurers. While many people can recommend a broker, the one you choose should be very experienced in dealing with firms of similar size and in the same industry as your own.
A good place to start in finding a reliable broker is to use one designated by the Registered Health Underwriters (RHU). RHU brokers have completed relevant coursework and passed a series of exams concerning the health insurance industry.
Be Aware of your Needs
Before selecting a group health insurance policy, it is important that you do consider and evaluate the needs of the potential members of the group. Some things to keep in mind, to discuss with your broker are:
- Some health plans have networks of doctors, make certain that yours is in it.
- Not all health plans will let you go outside the network, if this is important to you make sure that your plan has an "out-of-network" benefit.
- Check for coverage of routine medical care. Not all plans cover "routine checkups" or cover them only in small amounts.
- Check the drug benefits. Forty percent of the cost of medical care is for drugs. Some health plans use a formulary system to determine which drugs they will pay for. Make certain that this formulary is extensive and that your doctor is willing to prescribe off of the formulary if necessary.
Employees usually rank health care coverage as the most important of all employee benefits. Yet it is also an attractive benefit for many employers. By pooling risk, businesses can purchase health coverage at a much lower cost than individuals. In addition, tax benefits ensure that health care is a very cost-effective way to compensate employees.
