Group health insurance makes individual coverage available on a group basis. The purchasing power of the group that achieves reduced acquisition costs for the insurance company is a primary advantage of this insurance coverage. To provide insurance for each individual member of the group, the insurance company is then able to reduce the rate it charges.
To provide additional benefits for its members, the Group is in a better position to bargain with the insurance company. Variety of types of group health insurance plans are there, the major variations being the purchasing mechanism used for insurance.
Common types of group health insurance plans contain:
Health Maintenance Organization (HMO) - a group program under which a full range of medical services to participants is provided by the organization. Participants are either assigned or select from a group of general practitioners, who then refer their patients to experts when the necessity arises.
Good generalized system of providing medical care, which is marked by limitation in selection by the individual participant of the health care provider who renders services. Individual participants insured by an HMO are called "enrollees".
Self-Funded ERISA - accessible to large groups. To handle the paperwork, the group contracts with an insurance company or third-party administrator. In addition to the added cost for administration, the group pays for all costs associated with the operation of the insurance plan itself.
Association Group - similar to a fully insured employer group, the distinction being that rather than an employer, it is a different type of group, for example a credit card company offering insurance as a benefit to its cardholders or a church group offering insurance to its parishioners.
Group Managed Care - By means of the group or association, a long-term health insurance plan offered.
Preferred Provider Organization - another sort of health care network (doctors, hospitals, and other health care providers) that contracts with health insurance companies.
Fully Insured Employer Group - The employer contracts directly with the insurance company to provide certificates to covered employees. Typical arrangement is either for major medical or for health maintenance organization (HMO) coverage.
Small Employer Group - By means of gathering small employers together to form a larger group, insurance companies group certain industries together. These groupings facilitate the insurance company to predict the best cost of providing the insurance.
Unless charged a much higher rate, the small employers can then get coverage otherwise not available. Devoid of any deviation, all the small employers get the same policy.
Large Employer Group - same as a fully insured employer group to provide individual certificates to covered employees with direct contract between the insurance company and them.
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