Group Insurance Benefits
Group insurance benefits are specific insurances designed to be purchased for a group of people, whether employees of a company, members of an organization or another designated band of people. Many times a company will pick up the costs, or at least a portion of the costs, for the coverage of employees so it is considered one of the benefits for working for that business. When evaluating a prospective employer, the extent of the coverage offered under the group insurance plan and the percentage of payment made by the company should be taken into consideration by the prospective employee. Sometimes the benefits offered at a workplace can be a deciding factor for an individual when choosing a place to work. The group insurance can also include the dependents of the group members, although this is not always the case.
Group Insurance Types: Group Healthcare Insurance, Group Dental Insurance, Group Life Insurance and Group Disability Insurance
Group insurance ranges from traditional insurances such as group healthcare insurance, group dental insurance, group life insurance and group disability insurance; while expanded benefits can take in both vision and dental insurance. One of the positive aspects of a group insurance policy is that it is usually less expensive than individual policies and the larger the group, the better the rates. Another advantage of a group insurance policy is that the benefits are usually available to all members of the group so that an individual can not be denied coverage due to a pre-existing condition.
Why Group Insurance Makes Sense
In a group, the risk to the insurance company is spread over a broad range of people. Even though all the participants pay the same premium, some of the individuals will use the insurance to a much greater extent than the average while other people will make very few claims to the insurance company. This is especially true with health insurance where the mix of insured can range from the very healthy to those with serious illnesses. The insurance company bases the rates of the group on the anticipated amount of usage by the population. A group that has been working with an insurance company for a number of years may have either a raise in their health insurance rates or a decrease in the rate because of the established history of usage by the members. Maternity coverage is usually covered in a group policy – especially if the group consists of employees of a business.
There are also some disadvantages to group health insurance plans. The choice of services and/or health insurance plan is necessarily limited to what is offered to the entire population of the group. It can not be individualized to fit any member’s specific requirements. Some policies require a waiting period for new members with pre-existing conditions. Group insurance policies are normally renewable on a yearly basis rather than at anytime during the year. This is especially true with a large company that may offer a number of different packages to their members where there will be scheduled enrollment times – usually only once a year.
Group insurance benefits are available to suit the needs of a variety of companies and organizations. Some businesses go with basic health benefits while others add vision, dental and hearing to their health package and even offer short and/or long term disability and life insurance options. The plans can be purchased by the group from an outside vendor and can be customized by the group with a variety of options for member contribution. Some larger companies provide a self-insured plan where the company covers the payouts on the policies internally. The two options can also be combined with the company covering up to a certain limit and a catastrophic plan taking over for very large payouts.
Group benefits can be the deciding factor when choosing a company and/or organization to join. Astute employers try to remain competitive by offering the strongest group insurance benefits packages they can afford.
