Group Health Insurance Policies Offer Buying Power
Group health insurance plans are health insurance policies that are jointly shared by members of a group or organization. Generally, group health insurance is purchased by an employer to cover all the employees. Employers either offer the group health insurance as benefit, or charge the employees a nominal fee.
Group health insurance offers the purchaser buying power which will result in lower health insurance premiums. Self Employed individuals do not qualify for group health insurance and therefore have to pay much more than individuals that buy into a group plan. There are many different types of group health insurance. Generally, the larger the “group” the more buying power you have and the lower the premiums. Other factors play a part in the final premium cost such as deductibles, co-pays and whether the plan is part of an HMO.
Group health insurance policies are one of the most important benefits an employer can offer to employees. A recent survey showed that people valued a comprehensive health plan as the most important benefit after wages. Due to new laws going into affect as a result of Obama Care, medium to large sized companies will have to offer health insurance required by law. So, whether you are a large or small company you should seriously consider purchasing health insurance for your employees. Studies have shown that employees show more loyalty to companies that offer good benefits with health insurance being at the top of the list.
Employers need not pay all the expenses associated with a group health insurance policy. Many times the company can write off all of the payments from their taxes. Many times companies will make the employee pay a portion of health premiums, or at the very least make them pay for their spouse and children. Employees can pay for their premiums using their pre-tax wages, therefore reducing their taxable income.
Depending on the state the company is located, the company must pay some percentage of the employees health premiums, but not all of it. The employer may have to pay as little as 25%, and as we mentioned previously, that amount can be used as a tax deduction. Group health insurance policies generally allow employees to add their spouse and children onto the policy. Employers are not required by law to pay any of the additional premiums. Due to the buying power of group health insurance it tends to be a very cost effective option to add spouses and children onto the group policy. The premiums will be much lower than purchasing individual health insurance policies.
There are different types of health insurance and with group policies it is no different. There are HMO’s, PPO’s, POS and health savings plans. The prices can vary wildly, so you need to shop around and ask all the pertinent questions.
No doubt Group Health insurance offers the benefit of buying power, but health insurance is still expensive. Any company that would like to offer health insurance to their employees needs to do their homework. It is a good idea to contact several health insurance providers and ask the right questions. Make sure you received multiple quotes from multiple companies.