For one, individuals don’t have to pay any premium. Their employers take care of it. This is one of the biggest reasons why employees often demand (or at least prefer) group health insurance over individual plans.
But the benefits don’t end just there. Group health insurance policy comes with plenty of pros that positions it over individual plans.
Advantages of Group Health Insurance
1) Covers pre-existing health conditions– This is a significant benefit of group health insurance. It covers all the pre-existing health conditions, including diabetes and heart disease, with no waiting period. In contrast, individual health policies usually don’t cover existing conditions. And the plans that do, there’s a waiting period for years.
2) No medical check-up needed– Given the previous point, this makes sense. Since group plans do not exclude any pre-existing condition, there’s no need for any medical check-up. Contrarily, individual healthcare plan requires thorough health check-up before you’re insured and premium is defined.
3) Zero waiting period– With group health insurance plan, there’s no waiting period. The employer can discount that period by paying an additional sum. So, the health coverage starts from the day one when the insurance was allotted. On the other hand, individual healthcare policy usually has a waiting period. This waiting period – as to how long it would be – depends on the benefits the policy brings.
These are the primary benefits why employees rally behind group health insurance plan.
From the employer’s POV, the group has several pros. For instance, they enjoy tax benefits. Giving health benefits also increases employees’ job satisfaction; it increases employee retention.
But all said, group health insurance also comes with several disadvantages.
Disadvantages of Group Health Insurance
For instance, in many cases, the coverage amount could be limited and may not fit employees’ health needs. After all, organizations primarily focus on their finance; they won’t spend extravagantly on group health plans. In the same context, due to financial hardships, many employers may even reduce the coverage amount. In some cases, they may even ask the employees to co-pay the premium.
Similarly, to benefit from the group insurance, the employee must stay with the same employer. When they leave the organization, their health benefits will end. This is quite problematic because the new organization they join, they may not necessarily offer the employees the health benefits. And even if they do, the coverage amount could be too low. Such migrations could leave them in a vulnerable position.
Also, it’s worth noting that corporate health insurance won’t last beyond retirement. So, once you retire, you’ll be left uninsured.
Get Both the Insurance
This is why it’s usually recommended for individuals to have both the insurance plans for maximum coverage. Don’t get reluctant if your employer is offering you the health benefits. It has its limitations. In addition to employer-sponsored health insurance, also invest in individual healthcare policy. It will provide you sufficient coverage irrespective of who you’re employed with and how close you are to your retirement.