A Top List of Benefits and Limitations of Group Health Insurance

In today’s overly competitive environment, it is not only employees who find it hard to land good jobs, but even employers find it hard and challenging to attract and retain top talent. Business owners would know how important it is to have exceptional talent by their side.

Hence, to attract and retain them for the long term, companies offer multiple benefits to employees that keep them pleased. One of the various benefits companies are taking advantage of is group health insurance. It is a customized health insurance plan covering a group of people working under the same company.

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These plans offer various benefits to both employees and employers, but like anything else in the world, even they come with certain disadvantages. If you’re interested in group health insurance, you should start learning about it by knowing its benefits and limitations. To make your work quite easier, we’ve done the research for you. So let’s take a quick look at both.

Benefits of Group Health Insurance

Group health insurance offers a host of benefits for employees. Some of the top benefits have been listed below:

  • Coverage at No Cost

Since the employer pays for the group insurance, employees can take advantage of the group insurance at no cost. Generally, employees are covered in the plan. Some companies give employees the option to include their dependent members, like spouses, children, and parents in the policy for extra premium cost. The premium for the family members may have to be paid by the employees, but it is best to discuss the exact terms and conditions with the company’s HR.  

  • Hassle-free Claim Process

No one likes following up with multiple customer support agents during times of claim. Luckily, group health insurance takes away this worry from employees. Since the company directly deals with the insurer and their relevant people, you can get your claims settled via your company HR. You have to inform your employer of the medical emergency, and HR will take it from there. It can save much of your time and offer peace of mind, which is priceless.

Also Read – How to Pick Health Insurance for your Employees

  • Happy & Satisfied Employees

When employees’ health concerns are taken care of, they are guaranteed to be happy and satisfied with the employer. It can also dramatically improve employee retention rates.

  • No Hassle of Keeping Multiple Policy Documents

Since the employer is the direct buyer of the policy, employees don’t necessarily have to involve in lots of paperwork. The HR will be responsible for maintaining the necessary paperwork for all the employees covered under the policy. It can come as a huge relief since you won’t have to worry about keeping multiple papers securely.

  • Decent Coverage for Employees

This employer-sponsored insurance offers decent coverage to all those covered. Everything is covered in the coverage, from accidental hospitalization to illness-related hospitalization, psychiatric benefit to maternity benefit. These are the standard coverage items that good group health insurance offers. They may be subject to change, depending on the type of group insurance purchased by the employer.  

Because of these benefits, both employees and employers are happy with the insurance plan.  

Limitations of Group Health Insurance

Now that you’ve learned fairly about group health insurance benefits, it’s time you know their limitations too. Below is a list of some common limitations of a group health policy.

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  • No Option to Customize Policy as Per Own Will

Though group policy offers decent coverage, it cannot be enough for some, especially for people with certain illnesses or diseases. The bad part of any group health plan is the lack of an option to customize it by employees and its limited coverage. If you’re someone who wants the best coverage for yourself, you should invest in a comprehensive health insurance policy. This policy can be customized as per your own will at a reasonable cost.

  • No Tax Benefit

If you were planning to claim the group health insurance premium amount in your tax returns, there’s bad news. You cannot claim an insurance premium amount in your tax returns if you aren’t paying them. Employers pay for all group health insurance policies, so employees cannot claim the premium.

  • Policy Remains Valid till Active Employment

Any person covered in a group health insurance plan can only continue to enjoy its benefits till its employment lasts with the employer offering the same. So if you ever plan to change the company you’re working with, your insurance benefits will cease to exist from your termination date. It is why it is best and safe to have a separate, individual health insurance policy whose validity remains active as long as you pay its timely premiums.

Also Read – Is an Employer’s Health Insurance Enough to Cover All Your Health Issues?

  • Unreliable for Personal Financial Planning

Many people use insurance as a financial tool because the premiums paid towards insurance can be used to claim deductions in tax returns. But if your current employer is paying for it, you cannot benefit from it in terms of financial planning. Moreover, financial planning can be disrupted if you suddenly have to leave your job and end up losing all the medical benefits too.

  • Coverage can be Inadequate for Some

Group health insurance offers limited coverage. So if you’re someone who values your life and wants to remain extra cautious in terms of financial planning, relying on group insurance may not be the best option. If you’re going to secure yourself in the best way possible, taking a separate, additional health insurance policy can be the best way ahead. It will allow you to pick the coverage of your choice and assist you during medical emergencies.

Knowing two sides of the same coin helps us make the right decision, and the same is the case with group health insurance. Now that we’ve presented both the limitations and benefits of this policy, you’ll be better prepared to make the best decisions for yourself.

 Also Read – 5 Reasons Why Business Insurance Is An Essential You Can’t Live Without

About Carson Derrow

My name is Carson Derrow I'm an entrepreneur, professional blogger, and marketer from Arkansas. I've been writing for startups and small businesses since 2012. I share the latest business news, tools, resources, and marketing tips to help startups and small businesses to grow their business.