Group health insurance is a well-known, popular health benefit option. Most full-time workers have heard of group health insurance if not having been directly enrolled in a policy. Read more as we answer the question: what is group health insurance and why choose to offer it?
What is a group health insurance plan?
Group health insurance plans are designed to cover a group of members, collectively. The group is generally made up of employees or members of the same operation, corporation or organization. By insuring members as a group, both they and their employers can save on costs, premiums, deductibles, etc.
How does group health insurance work?
Employers purchase group health insurance plans for their employees and their dependents. Employees then receive the same benefits as part of the group plan. If employees want a separate insurance plan, they may choose to decline the group plan as part of their benefits. However, the cost of purchasing a group plan is generally lower for employees. Employers can choose how much of the plan an employee pays for, but it’s generally just a percentage of the total cost per plan and taken directly from an employee’s paycheck.
What are the benefits of group health insurance?
The biggest benefit of a group health insurance plan is probably this: low cost. When you choose a group health plan, you spread risk (costly conditions) across your entire workforce and their dependents. This leads to lower premiums for members. It also helps the insurance company get a better look at who they’re insuring and allows them to spot patterns in workforce health and ways to better manage health, which also helps you save money.
Why choose a group plan?
Group plans have many benefits. For starters, today’s workforce expects more from their employers in terms of benefits packages. Companies that offer group health plans tend to attract and retain top talent versus employers who do not. Another reason to choose a group health insurance plan is price. In general, group plans cost less—both for employers and employees.
How many people do I need for a group health plan?
Remember, group health insurance is called “group” for a reason. That means you need more than one person to get one. However, if you’re interested in a small business group plan, you only need 2 or more employees to pursue your group health insurance plan. For large businesses, those with 50+ employees, guidelines are little different. You’ll need 70% of your workforce (not including owners, spouses or dependents) in order to shop a group health plan for your business.
Why is group health insurance more affordable?
The reason group health insurance is more affordable than individual plans is generally because of the numbers. The more members in a group plan, the lower the risk for the insurer—the lower the costs for members. This usually means lower premiums. It’s a lot like buying other products in bulk; the more you buy, the cheaper the price per piece. It helps employers cover costs for their group, and helps some employees afford insurance who possibly could not afford it without the group benefit.
Can I get a tax credit for group health insurance?
If you’re an employer offering group health insurance to your workforce, you might be eligible for a federal tax credit. This credit can be up to 50% of what you pay in. Providing insurance for your employees and their dependents can be expensive, but tax breaks can help.
There are a lot of advantages of group health insurance. At The Insurance Center we are happy to be your local independent agent and take pride in your insurance coverage. You can reach us at (252) 637-4173 or online at https://www.ticnc.com/health-insurance-open-enrollment/.