There are a number of advantages to group insurance, as compared to individual insurance plans. These are generally considered to be the lower cost of the plan, as well as the guarantee that the plan will not be canceled based on pre-existing or new conditions. Many workplaces or other groups offer group insurance plans to their members; because many people are then purchasing the insurance, the costs to administer the plan go down, and are theoretically then passed on to the members of the insurance plan. In many cases, the employer or group will also cover all or part of the cost of the plan, so members might have very low or nonexistent monthly premiums.
The first benefit to a group insurance plan is that it typically does not require any type of physical exam or health assessment before coverage is offered. People who are members of the group, such as in a workplace, are eligible for the insurance even if they have pre-existing conditions that might make them ineligible for private insurance. If people become severely ill or are injured while they are on the group insurance policy, it cannot be canceled because of this reason. It is a very safe type of health insurance.
In addition, if people then lose their job for any reason, they may be eligible for continued coverage under COBRA (Consolidated Omnibus Budget Reconciliation Act). Again, private insurance does not offer this option. Though some people cite the lack of choices as a disadvantage of group insurance, some larger companies offer various options for different employees. For instance, a young, healthy employee who does not go to the doctor frequently may have the option of selecting a plan with low premiums and a high deductible, or even simply a health savings account as part of the insurance plan, whereas an older person with health concerns may be able to choose a plan with a lower deductible and more healthcare options, all under the same group plan.
Group insurance plans offer benefits to the businesses offering them as well. Often, yearly tax incentives are available to these businesses, which can help to save money and reduce the cost of buying the group insurance. In addition, it helps to boost morale and satisfaction among employees when they feel as if their employer really cares about their health and well being, and ensures that they have options to care for their own health and that of their families.
