If you’re an employee of a business or corporation, you’ve probably heard the term group health. Perhaps you belong to an organization that provides its members with group health coverage. Many different employers and groups provide their employees and members with group medical coverage. Do you know whether or not you and the members of your immediate family are covered by a group medical policy? Just what exactly is group health coverage?
Group medical coverage is a single health coverage policy which is issued to a specific business, organization, or group. The most common type of group health coverage is a policy which covers a business with employees. All eligible employees and oftentimes their dependents are covered by the policy. All insurers are required by law to offer coverage to small groups. Group health coverage differs from individual medical coverage, a single policy issued to a single person or individual family.
The rules for group health coverage differ from those for individual coverage. Why? Well, the level of risk which is assumed by the insurer is calculated differently for a group than it is for an individual. With individual coverage, the insurer determines its premium rates according to the medical history of the person or individual family. Historically, insurers have evaluated a number of different lifestyle factors upon which to base their premiums or denied coverage decisions. Now, the Affordable Care Act brings important changes to individual coverage – insurers are no longer able to deny coverage based on preexisting conditions.
With group health coverage, insurers obviously cannot base their premium prices on the medical history of any one individual. Rather, the insurer takes a broad look at all members of the group. The insurer must consider a wide variety of statistics for the entire population of the group, including age and gender.