Good health insurance is very important, and hence – you should do your research when choosing which plan is the most suitable one for you. Group health insurance plans are provided by an organization to a group of employees, which is managed either by the management or by the group of employees itself. This can indeed be useful, but the arrangement comes with some downsides as well, all of which we will cover in the following text.
Advantages of the Group Health Insurance
1. Both Employers and Employees are Protected
While the employees are the ones getting the group health insurance, in which way are the employers protected, you might ask. Well, this type of insurance makes sure that the employers are covered in case of any kind of a workplace injury, as well as in any case of illness or disability. This way, employers are ensured that the insurance company covers all these expenses, thus, will not lose money due to employee emergencies, while the employees are protected as well.
2. The Family Members of the Employee are Also Protected
Group insurance terms and conditions guarantee that either spouse or other dependents of the employee can benefit from it, so, all the necessary treatment for the patient can be claimed. For finding alternatives with even more benefits, you can look into this even more yourself. Daycare, medicine, employee’s spouse maternity leave bills, all of these can be reimbursed – of course, the percentage depends on the state policy.
3. Network Hospitals
In case of emergency, employees are provided with a card that allows them to walk into any of the nearest registered network hospitals and get their treatment done without the need to pay the bills and then get reimbursed for their expenses. After the treatment is done and they leave the hospital, they do need to submit the bills to the insurance company so that the sum can be deducted from the total insurance money.
4. Easier to Gain Coverage for Pre-existing Conditions
If someone has a chronic illness or a pre-existing condition, they can gain partial reimbursement after purchasing the insurance plan. A pre-medical checkup is not necessary.
5. Tax Savings
Both employers and employees benefit from this one. Since it is necessary to pay taxes annually, it is a very good idea to protect the individuals through the group health insurance and thus get rid of tax deductions from the salary. Since the employer is the one helping out with this, the employee practically doesn’t need to opt for other alternatives for tax reduction.
6. Cheaper Coverage for Better Conditions
If all the benefits mentioned above aren’t enough, it is also good to mention that group insurance is generally cheaper to obtain than the individual health insurance.
Disadvantages of the Group Health Insurance
1. Not Suitable for Small Scale Businesses
Employers and employees have to contribute much more than they gain if they want to purchase a group insurance plan in smaller businesses. The insurance companies may not provide a reasonable premium price for a company with a small number of people.
2. Coverage Benefits and Limits Set by the Employer, Not Individual
This basically means that the employees have no legal say in how much is the group insurance going to cover.
3. The More People in the Group, the Harder it is for the Employer to Manage
Before the employer provides the insurance, he must research the employee’s medical history and previous employment plans, while also having to go through the current medical issues. There are many pre-requisites to provide the insurance policy to the employees, and all of these must be handled by the employer.
4. The Premium Amount is the Same Throughout the Employees
While some employees are at higher medical risk than the others, this is overlooked by the group insurance plan – meaning that the insurance amount is the same, no matter the medical history of the employee. So the one who is at risk is benefited with less premium and major claim, and the healthy person contributes to the other employee.
5. Plan Owned by the Employer, Not the Employee
Not all group plans are portable, which further means that the employee will lose coverage if he ceases employment. This doesn’t always depend on the employee, of course.
6. Family Protection Depends on the Employer
Well, sometimes employees do not even get the benefit to protect their dependents, since it depends on the employer’s policy. If they do get it, there are a few problems with this plan being the only insurance policy for your family. For instance, since the employees’ dependents have a lower amount of insurance money, if they are facing a serious health problem, the employee can’t transfer his sum to help his dependents, thus making the insurance plan of no use in these situations.
Weigh your options and consider the above-mentioned pros and cons. In the end, it really comes down to knowing what is important to you and doing your research to find the insurance plan that suits you the most.
Interesting related article: “What is Health Insurance?”