Health Insurance

Understanding group health insurance policy

Group health insurance policy is insurance coverage offered by an employer. The main advantage of group health insurance is the lower premium costs to the policy owner, owing to the fact that the insurance company has to provide group coverage. Part of the insurance premium here is paid by the employer. Employers offering group health insurance stand to gain through tax incentives and their employees most definitely expect such coverage as part of a good pay, particularly with rising medical costs these days. It can even be seen as an incentive to recruit and retain the best in the field for companies.

There are many types of group health insurance plans available. Here is a look at what these might be:

Fully Insured – In this type of a health insurance plan, the policy owner will usually get major medical coverage or Health Maintenance Organization (HMO) coverage. The employer signs a deal with an insurance company to offer such insurance to employees.

Small Employer Group – If you are working in a company categorized into the small employer group by insurance companies, you get the small employer group insurance. The insurance coverage you receive through your employer will cost much less and your employer can offer you coverage which they would otherwise not be able to offer since they are clubbed to this category. The reason why insurance companies club companies this way is to be able to calculate how much it would cost them to provide insurance to such companies or those which belong to certain industries and business sectors.

Health Maintenance Organization (HMO) – You can get medical services from a HMO, wherein you are put in touch with a network of medical care professionals from whom you can get medical assistance. Referrals for specialist medical care come from within this group.

Preferred Provider Organization – The PPO will get into contracts with hospitals or medical service providers, and in doing so will provide you a lesser fee. You have to be a PPO member to get access to their network of medical care professionals. As a PPO member, you pay up for services they provide. In return you get reimbursed for the cost incurred in medical treatment.

Association Group – Here you are part of an association, through which you get insurance coverage. You pay the association, who in turn reimburses you when you have to deal with medical problems.