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A group insurance policy consists of an insurance policy (usually major medical insurance) held by the company with sub-policies held by employees or individuals that are part of an insured group. Group insurance is most common in the workplace, where an employee can choose to participate in the employer’s chosen insurance plan, but group insurance is also offered by some professional organizations. The group is the number of employees that pay premiums from payroll checks (on a pre-tax basis) to participate in the plan. Participants have coverage under the plan, but are only afforded coverages chosen by the owner of the main plan – usually the employer or group.
The cost of everyone’s insurance is spread through the group, with fluctuations existing primarily for number of family members. Some employers absorb the entire group plan premium as a benefit to employees.
The most common types of group insurance are HMOs and PPOs and most group insurance has co-pays. Co-pays are a standard amount the insured person pays when visiting a doctor’s office or emergency room. The co-pay is not covered by the insurance company and is paid directly to the care provider.
The inclusion of a primary care physician or specialist depends solely on the type of policy chosen by the holder of the main group insurance policy. The options chosen by an employer are generally standard but can include or exclude specific coverages based on the main policyholder’s needs or concern for the cost of the policy.
Other group insurance policies exist
beyond major medical coverage and usually have a co-pay requirement. Some of the other types of group insurance policies include:
- Accident insurance coverage – Accidental death and dismemberment insurance is different from life insurance because it specifically covers death while on the job. It also covers an accident that leaves a worker disabled and is used in conjunction with disability coverage.
- Disability coverage – An employer may offer only short-term disability or both short and long-term disability insurance options for the group insurance. Disability insurance coverage will pay a disabled individual a percentage of their salary while they are disabled. Short-term covers the time period from the day after disability (up to 14 days after depending on the policy) to the 13-52 week mark (depending on the policy). Long-term disability will cover from 50%-70% of the original salary for 5-10 years or up to age 65 (depending on the policy).
- Life insurance – Life insurance offered through a group or employer is usually based on a multiple of your yearly income. If you choose coverage below a threshold decided by the company, you may be eligible for insurance without a doctor exam. Some plans also include a specific amount of life insurance that can be purchased for a spouse or for children.
Prescription coverage, vision coverage, and dental coverage are all additional group insurance options your employer or group may offer. They may be discount plans or co-pay based insurance plans. Check your description of coverage to find out specifically what is covered.