What is Group Health Insurance?
Group Health Insurance is insurance provided to members of a group of persons, as employees of one or more employers or members of associations or labor unions. The term is usually used to distinguish this type of health insurance from individual health insurance. One master contract is written to cover the group. (See also: group life insurance and group insurance.) Group health insurance is available to the full time employees of qualifying businesses.
A qualifying business is one that has been in business for at least 6 months and can provide a state quarterly wage tax return as evidence of employees on payroll. The insurance is guaranteed to be issued to all eligible employees and picks up coverage for any pre-existing medical conditions. This tends to be the most expensive type of health insurance.
Health insurance purchased through a group that exists for some purpose other than buying insurance, such as a workplace, labor union, or professional association. Health insurance written on a number of people under a single master policy, issued to their employer or to an association with which they are affiliated.
Benefits of having a group health insurance plan:
- After the initial set-up cost, group plans are generally cheaper because the insurance companies profit from having more people on their plans, even at a lower cost to the participants.
- Many employers cover part or all of the insurance premiums.
- Because an insurance company agrees to insure all employees/participants under a group policy, there are no physical exams or health history questionnaires to complete.
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