December 8, 2010
Benefits of Group Health Insurance
Group health insurance plans provide coverage to a group of people. The employer can be either a large company or small. Group Health Insurance plans are traditional or managed care. Health Maintenance Organization Plans, Point of Service Plans, and Preferred Provider Organization Plans are under Managed Care Plans.
Group Health Insurance Benefits
Lower Premium: As compared to individual health plans, group health insurance plans have a lower premium. The premium is dependent upon the risk profile. The greater the risk is then the higher the premium. According to the policy the premium per person is provided by the employer which will be a big help.
“Cheaper cost for additional Coverage”. Another benefit is this one. There are a number of benefits such as optical care, dental and medical care is much cheaper than before. The increased purchasing power can also have an effect of this scenario. Most insurance companies do not include the cost for pregnancy. Requesting this though is cheaper.
Pre-Existing Conditions: Health Insurance Portability and Accountability Act of 1996 (HIPAA ) limits the ability of the insurance companies to refuse coverage to an employee seeking insurance under the employer’s group health insurance plans. Moreover, the insurance company is not allowed to delve into more than 6-12 months of claims history. In case of individual health insurance policies, the insurance company may deny coverage on account of pre-existing conditions.
Tax Benefits: The fringe benefit in the form of premiums paid by the employer is not considered a part of the employee’s taxable compensation. In case of individual health insurance, a person has to pay the premium from his after-tax salary.
Employers get Benefits from Group Health Insurance
Tax Incentives: The premium paid by the employer for group health insurance is fully deductible, provided health insurance is offered as a part of the employee’s compensation.
According to the Consolidated Omnibus Budget Reconciliation Act (COBRA) in case a person loses his job, he can still be covered for 18 months after lay off under the former employer’s plan. Moreover, from March 1, 2009, a former employee has to pay only 35% of the premium of the policy while the remaining 65% would be covered by the Federal government.
Charles David Rogers is an excellent writer who writes articles for Health Insurance Oklahoma. He has been producing contents for sites such as this to share his expertise in health insurance with others.
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