Group Health Insurance
With group health insurance, a single policy covers the medical expenses
of many different people, instead of covering just one person. Unlike
individual insurance, where each person's risk potential is evaluated
to determine insurability, all eligible people can be covered by a
group policy, regardless of age or physical condition. The premium
for group insurance is calculated based on the characteristics of
the group as a whole, such as average age and degree of occupational
hazard.
How do you get group health insurance?
Find out whether you are eligible
Many employers offer group health insurance as part of their employee
benefits package. Other groups that may offer insurance coverage
include churches, clubs, trade associations, chambers of commerce,
and special-interest groups.
Apply for coverage
Although your individual health is generally not evaluated when
you apply for group health insurance, you must apply during the
specified eligibility period. For employer-sponsored health insurance,
this is often the first 30 days of your employment, or the first
30 days following your initial probationary period. For associational
insurance, this may be the first 30 days of your membership in the
group.
If you fail to enroll during this period, the insurance company
has the right to treat you as though you were applying for individual
insurance. This means you will probably have to answer extensive
health questions, and go through a physical examination. The insurance
company can then decide whether or not to insure you.
The purpose of the eligibility period is to reduce insurance costs
by preventing people from waiting until after they discover a health
problem to sign up for coverage. Both employers and associations
may also have an open enrollment period each year, during which
you may sign up for coverage, modify your existing coverage, or
add dependents to your coverage.
What are the benefits of group coverage?
You don't need a physical exam
Under a group health insurance arrangement, the insurance company
agrees to insure all members of the group, regardless of current
physical condition or health history. The only condition is that
the group members must apply for insurance within the specified
eligibility period. Clearly, this is better for those with chronic
health conditions, who might be unable to get individual insurance.
It's cheaper than individual insurance
Because only one policy is issued for the entire group, the initial
cost of establishing group coverage is lower than the cost of issuing
a separate policy to each person. Also, group insurance is somewhat
less risky for insurers than individual insurance, since the risk
is spread out among a larger number of people. Within a fairly large
group, it is almost certain that the good insurance risks will equal
or exceed the bad insurance risks. Since group insurance costs less
for the insurance companies to establish and administer, it generally
costs less to purchase.
You might get a break on premiums
In many cases, your employer or association will pick up some or
all of the group insurance premium. This can make group insurance
even more affordable.
What are the drawbacks to group coverage?
You can't customize your policy. In a group insurance situation,
the provisions of the policy are negotiated between the insurer
and master policyowner (usually an employer or association). You
may not have the freedom to have provisions included or excluded,
and your deductible amount and co-payment percentage are determined
in advance. In some situations, however, you may be able to choose
between two or more insurance plans.
Please Note: The information contained in this Web site is provided
solely as a source of general information and resource. It is a
not a statement of contract and coverage may not apply in all areas
or circumstances. For a complete description of coverages, always
read the insurance policy, including all endorsements Aetna HMO
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