Are You Covered Under a Group Health Insurance Plan?
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Group health insurance refers to healthcare coverage provided through your employer. These plans may be an affordable health insurance option for individuals because their employers pay a portion of the cost. Also, those with preexisting conditions cannot be denied group healthcare.
Learn the cost of group health insurance and how you can enroll in coverage.
How Does Group Health Insurance Work?
Group health insurance plans are usually offered by employers as part of their employee benefits package. After negotiating rates with the insurance company, the employer usually pays the monthly premium to the carrier but the employee may still pay a portion of the cost via a payroll deduction on each paycheck.
Group health insurance plans typically have an annual deductible averaging $1,763 a year for single coverage. Similar to any other type of health insurance policy, you are responsible for paying your coinsurance and any copays, which will both count toward your out-of-pocket annual limit. Once you reach this limit, the insurance company will cover the full cost of medical care for the rest of the year and you will no longer have to pay a copay or coinsurance.
If you are fired or quit your job, it is possible to continue your employer-sponsored health insurance for a limited time under the Consolidated Omnibus Budget Reconciliation Act (COBRA). However, you may be required to pay the full premium to maintain coverage. Your employer should provide more information about this on or before your last day worked.
Who Is Eligible for Group Health Insurance?
In order to qualify for group health insurance, an employee usually must be full-time but temporary employees may still get group healthcare benefits if they're working at least 30 hours per week. Private or independent contractors are typically excluded from coverage.
Any business under 50 full-time employees is not required to have group coverage for their workforce. However, businesses that employ over 50 full-time employees could be fined if they don't provide healthcare to their employees. Specifically, the IRS specifies that businesses that meet the following two conditions may be subject to a fine:
- Business of 50 workers does not offer group health insurance coverage OR it is offered but to less than 95% of its full-time employees
- At least one full-time employee uses a premium tax credit to purchase health insurance through the ACA marketplace
Some exceptions may be available for smaller businesses that employ 50 or more workers so it’s best to consult a business tax attorney to learn what penalties, if any, will apply.
Some group health insurance plans may also cover the employee’s dependents, such as their children or spouse. Any plan that includes dependant coverage must provide coverage until the child reaches 26 years of age. Also, keep in mind that you cannot be denied group healthcare because of preexisting conditions.
What Is Covered Under Group Health Insurance?
Group healthcare plans typically cover a range of medical services and treatments, including preventive care, emergency services, hospitalization, prescription drugs and more. The specific coverage offered will vary depending on the plan and the employer offering it. However, all plans offered are required to cover essential health benefits such as:
- Preventive care: Services include annual check-ups, vaccinations and cancer screenings, routine physical exams, blood tests, immunizations, prostate exams, pap smears and more.
- Emergency services: These services are designed to provide immediate medical attention in the event of a medical emergency and include ambulance rides, emergency room visits and hospitalization. Employees who are hospitalized can expect coverage for surgery, anesthesia and diagnostic tests, as well as room and board and nursing care.
- Prescription drugs: Prescription drug coverage may be subject to a deductible, copayment or coinsurance. Remember that your plan may have a separate prescription drug deductible you'll need to meet before your plan will cover your drug costs.
- Mental health services: Services may include counseling, therapy and psychiatric care. As of 2008, there is no longer a separate deductible for your mental health coverage, meaning your physical health deductible and mental health deductible are the same.
- Rehabilitation services: This coverage may include services such as physical therapy, occupational therapy and speech therapy. These services are designed to help individuals recover from injuries, surgeries and other medical conditions.
- Maternity and newborn care: Services like prenatal care, delivery and postnatal care for both the mother and the newborn will be covered by your group health plan.
- Pediatric services: Involves routine check-ups, vaccinations and management of common childhood illnesses for children from birth to adolescence.
Dental and vision care are benefits that employers are not required to offer but may include in their employee benefits coverage. If included, employees may enjoy coverage for dental services such as routine cleanings, braces and fillings. Vision coverage may cover the cost of eye exams, glasses and contact lenses.
What Isn’t Covered?
While group health insurance plans typically cover a wide range of medical services and treatments, some services are usually excluded from coverage. Here are some of the common exclusions and limitations that are often found in group health plans.
- Cosmetic procedures: Procedures such as breast augmentation, rhinoplasty and liposuction or any other cosmetic service performed for purely aesthetic reasons.
- Experimental treatments: Treatments that are still in the clinical trial phase or that have not been approved by the FDA.
- Weight loss programs: Includes bariatric surgery or weight loss drugs. Some plans may cover these services if they are deemed medically necessary, such as in cases of obesity-related health conditions.
- Alternative medicine group: Acupuncture, chiropractic care or naturopathy. Some plans may offer coverage for these services as an optional benefit.
- Dental and vision care: Coverage is optional and offered at the employer's discretion.
What Are the Benefits of Group Health Insurance Plans?
Group health insurance is usually more cost-effective for employers than buying individual plans for each of their employees. This is partly due to the insurance company's risk being divided amongst the insured employees, as well as the cost being shared between the employer and the employee.
In addition, employers may also be able to deduct the cost of group health insurance premiums as a business expense, resulting in tax savings. Making health insurance more accessible for employees can also lead to a healthier and more productive workforce.
For employees, having access to health insurance ensures that they receive the care necessary to stay healthy. Also, the employer may also be responsible for a portion, if not all, of the monthly premium. If there is a cost to the employee, it is usually made pre-tax, which can result in savings back in the employee’s wallet.
How Much Does Group Health Insurance Cost?
According to the Kaiser Family Foundation, the average annual premium for family coverage in 2021 was $22,221, with employers contributing $16,253 (73%) and workers collectively paying the remaining $5,969. The actual cost of will vary depending on several factors, such as the location of the business, the number of employees and the specific benefits included in the plan.
How To Enroll in Group Health Insurance
While the exact steps for enrolling in group health insurance can vary slightly between each business and their internal procedures, they will generally include the following:
- Enrollment period: New employees typically have a 30-day window to enroll in an employer-sponsored healthcare plan. A human resources representative will usually explain the employee’s health insurance options as part of the new hire onboarding process.
- Review plan options: Consider factors such as the plan type, coverage options, deductibles, copays and coinsurance. Those who have few health concerns, such as the young and healthy, would benefit from a high-deductible plan with a low premium since they won’t be using medical services that often.
- Choose a plan: Select a policy that best fits your coverage needs and budget. Don’t forget to choose coverage for any dependents, such as a spouse or children, if available.
- Complete enrollment forms: This may include additional documentation, such as proof of dependent eligibility. Your employer will usually have a deadline for when you must submit the forms. If you have any questions or need assistance with the enrollment process, contact your employer's human resources department.
- Start coverage: After paying your first premium, you can enjoy healthcare coverage on your policy’s start date.