With group health insurance, a single
policy covers the medical expenses of many different people,
instead of covering just one person. Unlike individual
insurance, where each person's risk potential is evaluated
to determine insurability, all eligible people can be
covered by a group policy, regardless of age or physical
condition. The premium for group insurance is calculated
based on the characteristics of the group as a whole, such
as average age and degree of occupational hazard.
How do you get group health insurance?
Find out whether you are eligible
Many employers offer group health
insurance as part of their employee benefits package. Other
groups that may offer insurance coverage include churches,
clubs, trade associations, chambers of commerce, and
Apply for coverage
Although your individual health is generally not evaluated
when you apply for group health insurance, you must apply
during the specified eligibility period. For
employer-sponsored health insurance, this is often the first
30 days of your employment, or the first 30 days following
your initial probationary period. For associational
insurance, this may be the first 30 days of your membership
in the group.
If you fail to enroll during this period,
the insurance company has the right to treat you as though
you were applying for individual insurance. This means you
will probably have to answer extensive health questions, and
go through a physical examination. The insurance company can
then decide whether or not to insure you.
The purpose of the eligibility period is
to reduce insurance costs by preventing people from waiting
until after they discover a health problem to sign up for
coverage. Both employers and associations may also have an
open enrollment period each year, during which you may sign
up for coverage, modify your existing coverage, or add
dependents to your coverage.
What are the benefits of group
You don't need a physical exam
Under a group health insurance arrangement, the
insurance company agrees to insure all members of the group,
regardless of current physical condition or health history.
The only condition is that the group members must apply for
insurance within the specified eligibility period. Clearly,
this is better for those with chronic health conditions, who
might be unable to get individual insurance.
It's cheaper than individual insurance
Because only one policy is issued
for the entire group, the initial cost of establishing group
coverage is lower than the cost of issuing a separate policy
to each person. Also, group insurance is somewhat less risky
for insurers than individual insurance, since the risk is
spread out among a larger number of people. Within a fairly
large group, it is almost certain that the good insurance
risks will equal or exceed the bad insurance risks. Since
group insurance costs less for the insurance companies to
establish and administer, it generally costs less to
You might get a break on premiums
In many cases, your employer or association will pick up
some or all of the group insurance premium. This can make
group insurance even more affordable.
What are the drawbacks to group
You can't customize your policy. In a group insurance
situation, the provisions of the policy are negotiated
between the insurer and master policyowner (usually an
employer or association). You may not have the freedom to
have provisions included or excluded, and your deductible
amount and co-payment percentage are determined in advance.
In some situations, however, you may be able to choose
between two or more insurance plans.
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information contained in this Web site is provided solely as a source of
general information and resource. It is a not a statement of
contract and coverage may not apply in all areas or circumstances. For a complete
description of coverages, always read the insurance policy, including