Many people have used the passage of Obamacare, or the Affordable Care Act (ACA), to sign up for affordable health insurance policies through state-run exchanges. Those who qualify have even been able to take advantage of assistance when it comes to paying for this mandated coverage. Others have continued to purchase insurance outside of the Obamacare system, opting to pay out-of-pocket for coverage from private insurance providers. However, there is also a large segment of the population that participates in group health insurance plans.
Group health insurance, put simply, includes health insurance policies purchased by businesses, which then offer low-cost plans to their employees as part of a benefits package. This is not to be confused with a “group health plan”, which could include any number of health benefits provided by an employer, such as medical care or reimbursement, in addition to insurance. In other words, group health insurance falls under the larger umbrella of a group health plan. The distinction may not seem important, but before you accept a benefits package through your employer, you need to understand that group health insurance is always a group health plan, while a group health plan may not necessarily include group insurance.
Group health insurance is beneficial to both businesses and employees. On the business side, it provides a competitive edge when it comes to hiring the best candidates for jobs. In addition, most businesses are required by law to offer group health insurance to employees. A failure to do so could result in penalties, depending on the obligations of the company. Although laws pertaining to requirements differ by state and the size of the company (based on number of employees), the vast majority of businesses are now required to provide group health insurance. Small businesses, however, may be eligible for considerations like tax credits.
As for individuals, group health insurance offered through employment often provides for the best coverage at the most affordable rates, especially if plans include family coverage for a spouse and/or children. This has to do with the bargaining power inherent to purchasing such plans. When employers purchase group insurance plans, they are practically guaranteeing a certain number of policies based on their headcount (and future hires). This gives them the ability to spread risk and negotiate for lower prices, which are passed along to employees. In addition, employers pay a portion of the cost for policies, allowing individuals they employ to pay even less.
Businesses may elect to offer a variety of group health insurance options, including HMOs, PPOs, and perhaps policies through multiple insurance providers. Under Obamacare, such plans must also include several tiers of coverage (bronze, silver, gold, and platinum) with varying levels of coverage and cost. In short, group health insurance is perhaps the best overall option for individuals seeking coverage. While not all employers are required to offer group health insurance – small companies with fewer than 50 employees remain exempt – many have seen the benefits of doing so whether they’re require to or not. Thanks to Obamacare, the majority of companies of 50 employees or larger (with few exceptions) are required to offer group health insurance, helping to bring affordable healthcare to the masses.
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