What Is Group Health Insurance?

Group health insurance refers to an insurance policy issued to a group (typically, a business with 2 or more employees) that covers all eligible employees and, sometimes, their families.

The qualifications and premiums are quite different for Group Health Insurance versus an individual insurance policy. With individual coverage, the insurance company will base its premiums (or deny coverage) on the applicants medical history.

With group health insurance, the insurance company determines a premium price based on risk factors that are balanced over the entire group, using broad information on groups members, such as age, gender, and medical history. Perhaps most importantly, insurance companies are required by law to offer coverage to groups.

Is Health Insurance Required?

There are no laws requiring employers to offer group health insurance. If your group of business does offer group health insurance coverage, you will be subject to your states laws and regulations.

Is Your Business Eligible for Group Health Insurance?

To qualify for Group Health Insurance, a business has to meet certain requirements. A small business is defined as a business with 2 to 50 full-time employees. A large business is defined as a business with more than 50 full-time employees. Owners or management are considered employees, this can mean that sole proprietorships, LLC’s, and self employed that have a separate tax ID number for their business, with one employee or more fall into this category, as do partnerships without with two or more partners.

Who Is Eligible for Group Health Insurance Coverage?

Generally if an employer offers group health insurance coverage to any full-time employees, than the that employer must offer health insurance coverage to all full-time employees, however an employer may be able to designate employees by class, such as management. At GroupHealthInsuranceQuotes.com we will be able to assist you with the specifics.

As for part-time or seasonal employees, the employer has the option of offering group health insurance coverage. However if the employer offers coverage to any part-time employees, then all part-time employees must be offered the health insurance coverage.

Regardless of the medical condition, any eligible employee’s will not be denied coverage based on previous health or medical problems also known as pre-existing health conditions.

Additionally, any dependents of eligible employees are also generally eligible for coverage under a group plan, although their premiums are paid by the insured using pre-tax dollars (income is not taxed).

What Do Employers Have to Pay?

Most insurers and group health plans require employers to cover a portion of the premium cost for their covered employees. This is meant to encourage more employees to enroll in the health insurance plan. Some employers may choose to pay the full premium amount; others require employees to pay their portion (sometimes up to 50 percent) and can be 100%.

Employers are not obligated to pay for insurance premiums for dependents. Basically, employers may contribute towards the insurance premiums for dependents, but are free to require their employees to pay for the full insurance premium cost for their dependents coverage.