Group insurance is a form of insurance coverage that covers several people within the same policy. Though most commonly associated with health insurance coverage, group life insurance policies may be purchased as well.
In many cases, group insurance coverage is purchased for employees that have a common employer. Group insurance may also be purchased by a group of professionals or by members of society. Depending on the group insurance policy, the members of the group may be able to convert the coverage to individual coverage at a later time if desired.
The Benefits of Group Insurance Group insurance generally costs each member of the group less to have the same coverage than it would cost to purchase the coverage alone. This is because the insurance company does not have to pay as much to maintain the policy because all of the members are covered under a master policy. This savings is then passed onto the group. A group insurance policy may also offer more services and more coverage than a person would get on a single insurance policy.
Who Purchases Group Insurance Policies Group insurance polices can be purchased by any group of people. Common groups to take advantage of the benefits of group insurance policies include:
• For-profit businesses and corporations
• Non-profit organizations
• Labor unions
• Service groups
These group insurance policies can be purchased to just benefit the members of the group or may be extended to also include the dependents of these members.
Getting Covered Through a Group Insurance Plan
When signing up for a group insurance plan, each member of the group receives an insurance certificate. Depending on the master policy, the members of the group insurance plan may also be required to be a part of an HMO or they may be linked to a major medical group like Blue Cross/Blue Shield.
Once the group insurance policy is established through a person’s employer, the payments toward the coverage are generally removed directly from the person’s check. If purchasing for a group such as a church, however, someone will need to be designated for collecting the payments from the members unless the payment is absorbed by the organization.
What to Expect from a Group Health Insurance Plan
In the case of a group health insurance policy, members may be restricted when it comes to choosing their physicians and specialists. In addition, the exact benefits can vary from one company to the next. Most group insurance plans provide coverage in the case of emergencies a pay at least a portion for routine medical procedures. Many will also cover the costs of receiving extended care in a hospital or when seeking help through a rehabilitation center. Some will also provide a limited amount of coverage for dental and vision care. Many group insurance policies also cover prescription drugs, though most will require the insured to pay some form of co-payment.