Group insurance is a health coverage plan in which individual employees or members are included in a "core policy" owned by their employers. Because the group insurance plan has so many payers, the policy generally provides coverage for more services at a much lower cost per participant. Group insurance may be provided by organizations other than for-profit companies. 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 certificates of insurance showing their eligibility for benefits. If the employer's primary policy requires membership in a Health Maintenance Organization (HMO), individuals will also register for membership. Other group insurance policies may be associated with large medical groups, such as Blue Cross/Blue Shield. A major medical policy may or may not restrict an individual's choice of a primary care physician and specialist. HMO policies generally require a patient to use a specific physician, who must approve all visits to eligible specialists.
Funding a group insurance policy is usually a flexible payroll deduction, although some companies absorb the full cost of the policy as an employee benefit. However, as with many insurance policies, the cost of premiums can increase significantly without notice. If some participants receive expensive treatment for serious medical conditions, the rest of the group may have to absorb the costs of higher premiums over time. Group insurers do not always require medical examinations before issuing a main policy, so some participants may benefit from treatment for pre-existing conditions.
The benefits of group insurance can vary greatly from company to company. Almost all policies cover routine and emergency medical procedures, such as regular doctor visits and hospital treatment for accidents. Most cover long-term care in hospitals or rehabilitation centers. However, group insurance may or may not cover the employee's spouse or dependents. Some offer assistance with vision care or dental work, but coverage may be limited to specific procedures. Mental health needs may also be covered by group insurance. Prescription drug expenses are usually included in group insurance benefits, but likely with a co-payment provision. Under a co-pay plan, the covered person must pay a fixed out-of-pocket price for branded and generic drugs.
Group insurance is definitely more affordable than a similar number of individual policies, but there are some downsides. Some members feel that their medical and treatment options are too limited in an HMO insurance plan. Even major health plans can restrict the list of approved doctors, often called a PMD (Preferred Physician) policy. Employers who fear large premium increases may take an unusual interest in their employees' private health problems. Companies may suddenly implement strict “no smoking” policies or strongly encourage other preventive health programs. Some may find this interest in their personal health intrusive.
Many employees see group insurance coverage as an important benefit to faithful service to the company. Premium payments are usually deducted automatically and pay for themselves after a typical trip to the ER. Extended coverage for spouses and dependents also provides peace of mind and a sense of security.