Group insurance is coverage issued to a group of members as part of an employee benefits package, rather than insurance you purchase on your own. If you’ve ever enrolled in health, dental, vision, or other insurance coverage through your work, then you’re familiar with the concept of group insurance.
According to the Kaiser Family Foundation, around 50% of Americans are covered by employer-provided group insurance.1 It typically comes at a lower cost than an individual policy, as your employer may contribute toward the cost of coverage.
How does group insurance work?
Group insurance plans are purchased by organizations and provided as employee benefits.
Although it’s called “group” insurance, each employee is enrolled in their own policy just as they would be if they had purchased insurance independently. The word “group” simply references the fact that an insurance provider is covering a group of people associated with a single organization.
If your company offers group insurance as an employee benefit, you can choose to enroll in or decline the coverage that you are eligible for. If you choose to enroll, your premium payments may be covered in part by your employer. In some cases, your employer may cover all or most of the premium cost. Your own contribution toward the monthly premiums is often automatically deducted from your paycheck.
Health insurance is the most common type of group insurance. The Affordable Care Act (ACA) requires businesses with 50 or more employees to provide group medical coverage or be subject to a fee.2 However, your workplace may offer several different varieties of group insurance, including insurance plans that protect you and your loved ones in the event of accidents, illnesses, disability, or death.
If you’re an existing employee who chose to decline coverage when you were first hired, but have changed your mind since then, you’ll likely need to wait for open enrollment to sign up – unless you experience a qualifying life event.
Group insurance and open enrollment
Open enrollment is the period when you can sign up for group insurance coverage without experiencing a qualifying life event. Some employers try to align their open enrollment period with that of the ACA Health Insurance Marketplace, which occurs at the end of the calendar year. Some organizations may schedule open enrollment at other times, so be sure to check with your employer to see when open enrollment starts and ends.
Usually, if you’ve just started a new job or recently turned 26, you’ll fall under what’s called a special enrollment period. This—along with other qualifying life events— allows you to sign up for coverage outside of the open enrollment period.
How does group insurance differ from individual insurance?
Group insurance is typically offered at a discounted rate through your employer. Individual insurance is a plan you purchase for yourself — either through the marketplace or from an insurance company directly — and often costs more.
Types of group insurance coverage
Common types of group insurance include health insurance, dental insurance, and life insurance. Although, there are a number of additional types of insurance that can be offered through your employer. Many supplemental insurances are extended to employees through group coverage as well. These can include:
- Vision insurance
- Accident insurance
- Disability insurance
- Hospital indemnity insurance
- Critical illness insurance
- Cancer insurance
- Legal insurance
If you want to learn more about the specific types of group insurance your workplace offers, check in with your HR representative. They’ll be able to explain exactly what options you have, how much they’ll cost, when to enroll, and how to enroll.
Benefits of group insurance
Group insurance coverage can be an excellent option if it’s available to you. It comes with a number of benefits that might make enrolling worthwhile, as outlined below.
- Lower cost: Because you typically split the price of insurance premiums with your employer, you’ll likely save money by enrolling in group insurance.
- No exams: Unlike individual insurances, group coverage typically won’t require you to disclose any pre-existing conditions or circumstances that might otherwise make it difficult to enroll.
- Ease of enrollment: Typically, group insurance coverage is managed by your HR representatives and requires little, if any, communication between yourself and the insurer to enroll.