Group insurance is a health care coverage plan in which individual employees or members are included under one master policy owned by their employers. Because the plan has so many contributors, the policy often provides coverage for more services at a much lower cost per participant. This type of insurance may be provided by other organizations besides for-profit companies. Labor unions, churches and other service groups can also obtain group insurance for recognized members and possibly their dependents.
Individual members of a group insurance plan receive insurance certificates which demonstrate their eligibility for benefits. If the master policy held by the employer requires participation in an Health Maintenance Organization (HMO), then individuals are also registered as members. Other group policies may be associated with major medical groups such as Blue Cross/Blue Shield. A major medical policy may or may not restrict an individual's choice of primary physician and specialists. HMO policies often require a patient to use a specified physician, who must approve any visits to eligible specialists.
Financing for a group insurance policy is commonly a flexible payroll deduction, although some companies will absorb the entire cost of the policy as a benefit for employees. As with many insurance policies, however, the cost of premiums can rise significantly without warning. If a few participants receive expensive treatments for serious medical conditions, the rest of the group may have to absorb the higher premium costs over time. Group insurers don't always require physical exams before issuing a master policy, so some participants may benefit from treatments for pre-existing conditions.
Benefits from group policies can vary widely from company to company. Almost all policies cover emergency and routine medical procedures such as regular doctor's appointments and hospital treatment for accidents. Most cover extended care in hospitals or rehabilitation centers. However, the insurance may or may not cover the employee's spouse or dependents. Some offer assistance for vision care or dental work, but coverage may be limited to specific procedures. Mental health needs may also be covered under group insurance. Prescription drug expenses often fall under group benefits, but most likely with a co-pay provision. Under a co-pay plan, the covered individual must pay an established price out-of-pocket for name brand and generic medications.
Group insurance is definitely more affordable than a similar number of individual policies, but there are a few drawbacks. Some members find their choices of physicians and treatments very limited under an HMO insurance plan. Even major medical plans can restrict the list of approved physicians, often called the PMD (preferred medical doctor) policy. Employers who fear large increases in premiums may take an unusual interest in their employees' private health issues. Companies may suddenly implement stringent 'no smoking' policies or strongly encourage other preventative health care programs. Some may find this interest in their personal health to be intrusive.
Many employees see group insurance coverage as a major perk for faithful company service. The premium payments are usually deducted automatically and pay for themselves after one typical trip to the emergency room. Extended coverage for spouses and dependents also bring peace of mind and a feeling of security.
