Definition of Group Medical Insurance

Working for an employer can provide you with a number of benefits such as a retirement plan and health insurance. The health insurance that you are offered through your employer is a group medical insurance plan. This kind of coverage is designed to limit the amount of money that you have to pay on medical expenses in the future.

Group Health Insurance

• Group health insurance is a type of policy in which the policy holders pay premiums in advance of needing medical service. The purpose of this kind of insurance is to limit out-of-pocket expenses for serious medical needs. For buying the policy for the group, the employer generally gets a discount on the normal rate from the insurance company. The business will decide on the terms of the policy.

Guaranteed Benefits

• One of the attractive features of group health insurance is that you are guaranteed to be accepted into the plan, regardless of your health. If you work for the employer that offers this type of insurance, you can get coverage. This is not always the case with individual health insurance policies. If you have a serious medical condition, you may not be able to get coverage with individual insurance. With group health plans, you may not have to answer health questions or take a medical exam.

Cafeteria Plan

• Some employers offer health insurance as one of many benefits included in a cafeteria plan. In this situation, the employee can choose between a few types of health insurance and other benefits like vision, dental or life insurance. An employee could also choose to participate in a flexible spending account, which allows the employee to save pretax money to pay for out-of-pocket medical expenses that are not covered by the insurance policy.

Features

• With most group health insurance plans, you can expect a relatively low deductible compared to what you would pay with a similar individual health insurance plan. Besides a deductible, the health insurance will also feature a co-insurance percentage. This is the amount of money that you have to pay in total for the year if you experience significant medical issues. Your policy may also come with a co-pay when you visit the doctor or need prescription drugs.