Group Health Insurance for Families

There are benefits for families to obtain medical coverage through group health insurance plans. These provide cost-effective health coverages as members generally pay less than one-third of their insurance premiums. Families are also able to get insurance even if their health statuses are in less than good condition. However, group health insurance has its disadvantages, such as excluding coverage on certain medical conditions for specific periods of time and affording no control over policies' options to its members.

Types

• Health insurance plans that group sponsors purchase to provide coverage for families consists of managed health care and indemnity health insurance policies. Three types of health care plans are available: Health Maintenance Organization (HMO), Preferred Provider Organization (PPO) and Point of Service (POS). These plans provide members with provider networks which are physicians who in exchange for patients offer discounted rates for health services. Members who use their provider networks receive higher insurance benefits as a result. Members typically pay less out of pocket as well. Indemnity health plans are more expensive than managed health care plans because it allows members more freedom to control their medical decisions. These coverages are fee-for-service plans which means members are reimbursed by their insurers after paying for their medical services.

Benefits

• Families covered under group plans do not have to provide evidence of insurability like they would for individual insurance plans. This means everyone who are eligible to apply are accepted regardless of their medical conditions. Families also are not responsible for all of the premium payments as well. In fact, employers cover over 70 percent of the insurance premiums for group policies according to the Kaiser Family Foundation. Another benefit of group health insurance is parents can keep their children on their plans until they reach 26 years of age.

Considerations

• Although group coverages cannot exclude any or all family members because of their medical histories, there are restrictions placed on the coverage of pre-existing conditions by insurers. For example, family members with pre-existing conditions have to satisfy specific lengths of time called exclusionary periods before insurers pay for any medical expenses resulting from these medical conditions. Exclusionary periods vary among states but they generally last 12 months. Insurance companies are prohibited by federal law from looking back on applicants' medical histories more than six months for pre-existing conditions.

Disadvantages

• Under group health plans, families do not control the coverages' terms and conditions. Plan sponsors make all the decisions concerning coverage and can drop coverage without their members' consent. Premium rates may go up to absorb the costs of other group members who use their insurance frequently or have major medical problems. Group members cannot take their coverages with them if they leave the group. For example, if employees leave their jobs, they are no longer insured under their health plans.