Learn How Group Insurance Plans Work

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July 27th, 2009

When you’re in the market for a great health care insurance policy, there are several things to look out for. Several different types of medical insurance plans exist, and to get the right one, you should look for a group health insurance plan to be a part of.

When you are part of a collection of insured people, you can usually negotiate for better services, coverage, monthly premium rates or lifetime benefit limits. If you don’t quite understand how these group insurance plans work, here are a few things to remember when thinking about securing your own contract.

Learn How Group Insurance Plans Work — The Power of Collective Bargaining

If you have an individual insurance policy, it costs a certain amount per month to insure you. The premium rates are set against the risk that something bad may happen and result in a claim. Obviously, the higher the risk, the higher the rates. And if you wanted to get a discount on that insurance policy, one common way is to sign up your family as well. Every person added to the plan means that the insurance company has another customer and an additional premium payment on its books.

Due to this reduced liability of the insurer, working as a group can help the members of that group attain better benefits at better rates than an individual would be able to get on their own. On average, the larger the group, the better the discount.

Learn How Group Insurance Plans Work – Coverage Options

Depending on how many features a group wants to get out of an insurance policy, they should be able to secure good benefit at a relatively low cost. When it comes to health care coverage, there are several features to be considered, including prescription coverage, maternity care, dental coverage or help with vision related costs. Each feature typically adds to the overall cost, but many plans now offer group members the ability to choose from a portfolio of possible options, each discounted to the group rate.

Learn How Group Insurance Plans Work — Deductibles

Deductibles still exist when you are covered by a group insurance plan, but the actual amount of the deductible can vary depending on the number of services that the group or the individual members elect to pay for. You can expect the deductibles to be significantly less with a group insurance plan, often in the range of 10% to 40% cheaper, depending on existing conditions, age and other factors.