Group Health Insurance Coverage
Group health insurance is an insurance product that provides health care benefits to those who are part of a group. Usually, these groups are those who are working for the same company, or maybe a group of companies, but it is not necessarily limited to this one application. These plans are based on the premise of safety in numbers. Even though a few will get sick, there is still a chance for the health insurance company to be profitable because the rest will remain relatively healthy.
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Employer-based Coverage
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The reason why most people choose group health insurance coverage through an employer is because that employer often helps offset some of the premiums costs. Some employers may even pay 100 percent of the premiums. Others require the employee to contribute usually between 10 percent and 50 percent of the premium cost.
Types
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Three main types of group health insurance plans and a number of other plans with smaller following are on the market. These plans include the health maintenance organization (HMO), preferred provider option (PPO) and point of service plans (POS). Each has some advantages and disadvantages, many of which come down to a personal preference.
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HMO Plans
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These are the plans that many people love to hate, simply because they are the most restrictive. Each person must choose a physician from the network to serve as a primary care physician. To go to any other physician or specialist, a referral must be made by this doctor. Those going out of network or failing to get prior approval before seeing a specialist will likely not have any benefits paid.
PPO Plans
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These group health insurance plans have network restrictions, but also allow the patient to go outside the network. In such cases, the patient usually pays a higher rate than he would normally pay if services were provided inside the network. Also, PPO plans usually do not require designating a primary care physician or receiving a referral before seeing a specialist.
POS Plans
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Point of service plans try to provide a middle ground between the HMO and PPO. The overall goal is to keep the patient in the network by providing incentives. These incentives may be better benefits or convenience. Often, people seeking service out of the network will have to submit their own paperwork and may even have to pay up front for the services and get reimbursed by the insurance company.
Costs
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As the most restrictive plan, people generally choose HMOs for one reason---cost. It is usually the cheapest type of group health insurance offered. PPOs can be a bit more costly, but offer flexibility the others do not. POS plans usually fall somewhere between HMOs and PPOs in terms of overall cost.
Choice
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In some cases, there will be no choice. An employer may only one type of plan or the other. In cases where both types of plans are offered--usually HMO and PPO--the employer require different premiums. Overall, any health plan is generally considered better than not having one at all.
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References
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