According to the U.S. Department of Labor, group medical insurance a health plan established or maintained by an employee organization, like a union, or an employer.
This welfare benefit plan is designed to provide medical care services for the participants and their dependents through insurance, reimbursement, directly or other similar means. In some cases, the employer and employee organization collaborate to offer a group healthcare plan for employees.
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Regulating Group Medical Insurance
The Employee Retirement Income Security Act covers most of the group health plans in the private sector. This act provides protections for participants, beneficiaries and participants rights’, including access to plan information.
The law also establishes fiduciary responsibilities and specific standards of conduct that individuals who manage group medical insurance are required to comply with.
Governing Group Health Plans
The Employee Benefits Security Administration is responsible for the administration and enforcement of the provisions established by the ERISA. The EBSA also offers plan providers and employers with ERISA compliance assistance. In addition, consumers can contact the EBSA to receive information about their health plan as well.
Generally speaking, group health insurance mandates are typically regulated by the state. The laws governing group health insurance offered by different types of employers can vary from state to state.
However, the implementation of the Affordable Care Act established some continuity and regulations focused on individual plans and employers with less than 50 employees on the payroll.
Employer Size and Group Health Plans
In regards to group medical insurance, the type of employer typically determined by the number of employees. Having less than 50 employees on the payroll qualifies as a small employer, while more than 50 employees qualifies as a large employer.
The laws governing coverage and how to determine premium rates depends on whether the employer is considered to be small or large.
Advantages of Group Medical Insurance
Today, most Americans have group health plan coverage provided directly from their employer or the employer of an immediate family member.
One of the largest advantages of belonging to a group health plan is that the employer typically pays for at least half the cost of the monthly premiums. In addition, many employers offer employees Premium Only Plans, or POP, that allow individuals pay for their premiums pre-tax.
Ultimately, the aforementioned advantages inherent in group medical insurance can help subsidize the cost that workers actually pay. Fortunately for employees, the contributions made by employers to the health plan are not taxed.
Many employees consider group health coverage one of the most important benefits offered by employers.
Small Employer Group Plans
Employers with less than 50 employees on the payroll are not actually required to offer employees a group medical insurance plan. However, the ACA does require group health plans insured by small employers to meet the standards established by the federal Platinum, Gold, Silver or Bronze plans.
The tiers of the metal plans represent different percentages the plans pay on, ranging from 90 to 60 percent, respectively.
Small employers are permitted to invest in group plans in the SHOP marketplace established by the ACA or outside the market. The ACA established modified community rating that determines rates for smaller employers based on limited factors like smoker status, geography, or age. In some cases, these employers may be able to offer employees a choice of different insurance companies, plans or metal tiers.
Large Employer Group Plans
Large employers cannot be rejected by an insurance company based on their claim history, and eligible employees cannot be denied large group coverage due to their medical history.
Federal laws mandate that large employers have their group plans renewed on an annual basis unless there is come type of unlawful offense like fraud an intentional misrepresentation.
Large employer plans are typically underwritten and the rates are determined by assessing prior claims experience and employee participation. The rate changes to the premiums each year are based on the most recent cost calculations for providing the healthcare services and the employer’s claim experience.
In many cases, the rates will depend largely on the size of the employer and the responses provided by a medical questionnaire dispensed to employees.
Finding the Right Group Health Plan
Right now, there are millions of Americans on a group medical insurance plan with a small or large employer. The type of group plan offered to employees depends largely on the state and size of the employer. In many cases, the larger the employer, the more choices employees can expect to have when selecting their group medical insurance plan.
If group health insurance isn’t right for you, there are plenty of affordable private health insurance plans on the market. Enter your zip code below now and discover them the best in your state for free!