How Does Group Health Insurance Work?

Group health insurance is insurance offered by an employer. It is typically employer-sponsored, but your employer can also obtain the group health insurance through an association. These plans serve as a major benefit to employees, all for a low cost.

What Kinds of Group Health Insurance Do Employers Offer?

Group health insurance works differently from one company to the next. But there are three common types of group health insurance – Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), and Point-of-Service (POS). Your company will likely offer one of these three.

How Do These Work?

All of the common plans provide coverage within a network consisting of healthcare providers in a given area. Getting services out-of-network will either result in higher costs, or you paying the entire bill out-of-pocket.

As for overall costs, large group health plans (employers with at least 51 employees) will have lower premiums relative to small group health plans (employers with 50 or fewer employees).

HMO plans have the most restrictions, but are the least expensive. Your coverage is limited to a network, and your plan won’t cover you outside of that network unless you have an emergency. You will choose a primary care physician from whom you will need referrals in order to see specialists.

PPO plans allow out-of-network coverage and do not require policyholders to choose a primary care physician. These plans provide more coverage, but offer the highest discounts for seeing certain physicians within the network. These are the most expensive of the three.

POS plans are a hybrid of HMO and PPO plans – they have the same requirements as HMOs, with the freedom to get coverage from out-of-network providers like PPOs.

If you have a plan that requires choosing a primary care physician, you may have to choose another primary care physician if the one you have chosen moves out of the plan’s network.

What Are the Requirements?

Group health plan requirements fall on the employer. Employers typically need a certain percentage of employees to hold the group health insurance policy in order to be able to offer it. This is usually 70%.

Private employers in Hawaii have to offer health insurance for employees working at least 20 hours a week, as per the Prepaid Health Care Act of 1974. Premiums are not to be higher than 1.5% of the employee’s monthly income.

How Do Employees Benefit From Group Health Insurance?

Group health is cheaper because the insurance company is taking a lower risk when insuring a large group of individuals. The coverage can be wide in the services and treatments covered, as well as the number of people who can be insured. Group health insurance can also cover employees’ spouses and children.

Get Your Group Health Plan Today!

Proinsurance Hawaii makes it so that nothing stands between you and the health insurance you deserve. We lend a helping hand so that you can get the care you need at the lowest price. Call us today at 808-735-0106.

We look forward to hearing from you.