What is a Group Health Plan?

A group health plan is a form of health coverage which provides care to a group of people such as employees of the same company, members of the same union, or people who belong to the same professional or community organization. Group health plans may be administered by the group to which the people belong, or they may be handled by other companies, as for example in the case when an employer contracts with a health insurance provider to get services for employees. In true group health plans, coverage is provided to everyone, with no exceptions for prior conditions and other issues.

Group health plans are often provided to employees of companies or government agencies as an employee benefit. In some cases, the plan provides insurance. Employees may be required to handle copays and other related expenses, or the employer may cover them. In other instances, care under the plan is provided on a reimbursement basis, with the employer paying employees for medical expenses which are authorized under the terms of the group health plan.

Some people benefit from a group health plan as soon as they join a group of people covered by the plan. In other cases, there may be exclusions on coverage, with people being obliged to wait a set period of time before benefits kick in, or with benefits only being offered to full time employees. In cases where people already have insurance, a determination will need to be made to see if the group health plan should be the primary or secondary insurer.

As a general rule, a health plan must cover 50 or more people to be considered a group health plan. Small businesses and smaller groups which want to offer health care to their members may not be eligible for certain discounts and benefits when they shop around for a group health insurance plan to offer to their members, as insurance companies often provide special discounts when coverage is purchased in bulk.

When health benefits are offered in the form of a group health plan, people should investigate the terms of the plan carefully. They may want to ask about who bears responsibility for deductibles, copays, and coinsurance, and what types of health care are covered under the plan. Coverage for spouses and dependents may also be available under a group health plan, which is something else to consider, as are restrictions on health care providers which may be mandated under the terms of the plan.