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What is a Group Healthcare insurance policy?

What is a Group Healthcare insurance policy?

Group Insurance health plans provide coverage to a group of members, usually comprised of company employees or members of an organization. Group health members usually receive insurance at a reduced cost because the insurer’s risk is spread across a group of policyholders.

Why should you buy a Group Healthcare insurance from MyonelifeX

We facilitate easy claim settlement through robust claim support.

What Is a Group Health Plan?

Group health plans are employer or group-sponsored plans that provide healthcare to members and their families. The most common type of group health plan is group health insurance, which is health insurance extended to members, such as employees of a company or members of an organization.

What Are Group Health Insurance Benefits?

Group health insurance plans offer medical coverage to members of an organization or employees of a company. They may also provide supplemental health plans—such as dental, vision, and pharmacy—separately or as a bundle. Risk is spread across the insured population, which allows the insurer to charge low premiums. And members enjoy low-cost insurance, which protects them from unexpected costs arising from medical events.

What Is a Group Health Cooperative?

A group health cooperative, also known as mutual insurance, is a health insurance plan owned by the insured members.5 Insurance is offered at a reduced cost, and what they collect from members is based on claims paid. The cost of care is spread out across the insured population.

How Much Does Group Health Insurance Cost?

The average group health insurance policy costs a little more than $7,400 annually, with employers paying approximately 80% and employees paying the difference.

How Many Employees Do You Need to Qualify for Group Health Insurance?

Many group health insurers offer plans to companies with one or more employees. The type of plans available, however, may vary according to the size of the business. For example, United Healthcare provides various plans for small businesses with 1-99 employees, midsize businesses with 100-2,999, and large employers with 3,000 or more employees.

The Bottom Line

Group health insurance plans are one of the most affordable types of health insurance plans available. Because risk is spread among insured persons, premiums are considerably lower than traditional individual health insurance plans. This is possible because the insurer assumes less risk as more people participate in the plan. For employees who ordinarily would not be able to afford individual health insurance, it is an attractive benefit.

Benefits of a Group Health Insurance Plan

The primary advantage of a group plan is that it spreads risk across a pool of insured individuals. This benefits the group members by keeping premiums low, and insurers can better manage risk when they have a clearer idea of who they are covering. Insurers can exert even greater control over costs through health maintenance organizations (HMOs), in which providers contract with insurers to provide care to members.


The HMO model tends to keep costs low, at the cost of restrictions on the flexibility of care afforded to individuals. Preferred provider organizations (PPOs) offer the patient a greater choice of doctors and easier access to specialists but tend to charge higher premiums than HMOs.

Example of Group Health Insurance

United Healthcare, a division of UnitedHealth Group (UHC), is one of the nation’s largest health insurers. It offers a buffet of group health insurance options for all types of businesses. Include are medical plans and specialty, supplemental plans, such as dental, vision, and pharmacy.


Small business plans are available in most states for companies with 1 to 99 employees. In addition to its proprietary plans, United Healthcare offers federally-sponsored marketplace options—Small Business Health Options (SHOP)— for small businesses.4 In exchange, some employers qualify for the temporary Small Business Tax Credit of up to 50%.


Midsize businesses, with between 100 and 2,999 employees, have various options available, including bundles. Large businesses, with 3,000 or more employees, qualify as national accounts, which have more services and healthcare features, including the ability to customize plan offerings.

How Group Healthcare Insurance Works

Group health insurance plans are purchased by companies and organizations and then offered to their members or employees. Plans can only be purchased by groups, which means individuals cannot purchase coverage through these plans. Plans usually require at least 70% participation in the plan to be valid. Because of the many differences—insurers, plan types, costs, and terms and conditions—between plans, no two are ever the same.

Once the organization chooses a plan, group members are given the option to accept or decline coverage. In certain areas, plans may come in tiers, where insured parties have the option of taking basic coverage or advanced insurance with add-ons. The premiums are split between the organization and its members based on the plan. Health insurance coverage may also be extended to the immediate family and/or other dependents of group members for an extra cost.

The cost of group health insurance is usually much lower than individual plans because the risk is spread across a higher number of people. Simply put, this type of insurance is cheaper and more affordable than individual plans available on the market because more people buy into the plan.

Key Takeaways

Group members receive insurance at a reduced cost because the insurer’s risk is spread across a group of policyholders.

Plans usually require at least 70% participation in the plan to be valid.

Premiums are split between the organization and its members, and coverage may be extended to members' families and/or other dependents for an extra cost.

Employers can enjoy favorable tax benefits for offering group health insurance to their employees.

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