Major Types of Group Health Insurance Plans

Health insurance coverage for an individual can be quite expensive. Many employers offer health insurance coverage to full-time employees as a benefit of employment knowing that individual coverage would be far too expensive otherwise. Employers and other organizations are able to achieve lower monthly premiums through contracts with insurance companies because they provide large groups of customers. There are several group plans used for this goal.

Large Employer Groups

• Large employers contract with a single national health insurance company to provide coverage for employees. Each employee receives coverage based on certain criteria such as length of employment and hours worked and cannot generally be turned down for pre-existing conditions due to contractual obligations between the employer and insurer. Employees have ways to tailor coverage to meet specific needs such as buying into a dental or eye plan option along with choosing deductible rates and coverage limits.

Small Employer Health Groups

• A small employer's group is an insurance plan to cover groups of employees from multiple employers within the same industry. This enables insurance companies to get a better feel for the liability issues within certain industries, according to insurance information website Free Advice. It also allows small businesses the opportunity to provide insurance for employees that would otherwise only be available at higher monthly premiums. Unlike large group health plans, the coverage choice for employees in small employer health plans is uniform throughout with everyone getting the same coverage.

Health Maintenance Organizations

• Health Maintenance Organizations, or HMO's, are contracted by large employers to provide a full array of health options for employees. Those insured through an HMO are assigned specific doctors they are required to visit in order for medical expenses to be covered. They may choose from a roster of approved doctors/physicians. A referral from an HMO-approved doctor is generally required in order to see a specialist when the need arises.

Health Association Groups

• A health association group is not insurance through an employer or directly through a health insurance provider, but rather through a third party such as a credit card company or special interest group. In order to participate in these group plans, you must be a member of the organization offering the plan. Spouses and dependents are sometimes eligible for these health insurance plans, but you should check with the specific plan to see if these people can be added.