Low Costs and Security: Benefits of a Group Health Insurance Plan

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By Flavia Calina

Group health insurance policies are insurance policies that cover the medical expenses of a group of insured people. In other words, group health insurance policies cover employees of a company or organization who want to cover medical costs as a group.

If you’re an employer who needs coverage for your employees, consider hiring a group insurance policy instead of individual insurance. Group health insurance policies are available at a subsidized cost from insurance companies. They have several benefits and advantages over separate health insurance policies. Group health insurance policies are preferred over individual insurance because group health insurance policies cover a group of people, and medical expenses are usually lower than respective health insurance policies.

What is Group Health Insurance?

  • Group Health Insurance (GHI) is an employer- or group-sponsored plan that provides health insurance to employees and their family members.
  • It is also known as corporate health insurance or group mediclaim policy.
  • Most GHIs cover medical expenses for employees and their family members, including hospitalisation, medical expenses, and prescription drugs. Some plans also cover medical costs incurred while travelling outside the country in medical emergencies.
  • After the COVID-19 lockdown in India, the Ministry of Home Affairs mandated all industrial and commercial establishments, workplaces, and offices to offer group medical insurance coverage to their employees.
  • This policy has many benefits for businesses, employees, and families. It helps companies attract and retain employees by offering health insurance and other benefits such as income tax deductions, accessible education facilities for children under 16, maternity leave policies, etc.
  • For employees, it offers coverage for medical expenses in case of an accident or illness.
  • For families with a member covered under a group health insurance plan, it offers financial protection in case of a medical emergency.
  • Besides that, GHI can help businesses save money by offering affordable health insurance options to employees.

Advantages of Group Health Insurance Policies

  1. Group health insurance policies offer employees a reliable and affordable approach to covering healthcare benefits.
  2. Group policies are essential in offering equal access to high-quality health care for employees and their families.
  3. Group policies cover pre-existing conditions, hospitalization, and medical expenses for members regardless of age or health status.
  4. Thus, group policies can customize health coverage by offering coverage for individual medical needs.
  5. Employees with group policies are assured of receiving health insurance coverage through their employment period, regardless of personal medical history or health conditions. They can also take medical leave without worrying about the financial burden.
  6. With group policies, employees get a secure workplace environment wherein they can focus on their work without fearing medical emergencies suddenly arising.
  7. Additionally, group health insurance policies also offer tax benefits for businesses.

That is why group health insurance policies are a welcome option for employees and businesses.

Benefits of Group Health Insurance for Employers

Group health insurance policies offer employers a way to cover employees with a single procedure. These policies cover a group of employees with various medical conditions and benefits.

Group health insurance policies also provide benefits for family members of group members, allowing employers to cover the medical expenses of an employee’s family without paying individual premiums. These policies offer coverage to a group of employees, which can save businesses money while providing benefits for employees’ health and well-being.

Group health insurance policies offer more than just health insurance coverage. They also provide benefits for family members of group members, which can help reduce individual health insurance costs for employees and their families. Overall, group health insurance policies are a great way for businesses to cover their employees and save money while providing them with benefits in health and wellness.

Why is Group Health Insurance Required?

  1. Group health insurance plan is a type of health insurance provided by employers or organizations to members and their families.
  2. It comes in three variations: employee-only, self-insured, and group insurance plan.
  3. Employee-only health insurance plan is a policy offered by an employer to employees only. It covers expenses for hospitalization, medical expenses, maternity expenses, day hospital expenses, eye expenses, medical expenses of the policyholder’s spouse and medical expenses of any dependents upon the policyholder’s policy coverage.
  4. Self-insured health insurance plan is offered by an individual or company that pays for medical expenses out of its funds. The individual or company has to pay a sum of money as a deductible, pre-existing conditions surcharge, and other additional sums depending on the individual plan selected.
  5. In group health insurance plans, group policies are issued by insurance companies in countries like the US. Through group insurance corporations, people can use the guidelines directly with individual or group policies.

What is Covered?

Group health insurance plans are typically offered by an employer or a group of employers to cover their employees and their family members. Programs may cover a group of individuals working for a company or organization. They provide coverage for employees and their family members, including parents, spouses, and children.

Sole-payer health insurance is another type of group health insurance plan in which a single insurer covers all of the plan’s beneficiaries. This is typically the case with health insurance provided through a government agency such as Medicare or Medicaid.

What is not Covered?

A group health insurance plan typically covers pre-existing conditions and maternity expenses but may exclude other benefits. For example, a policy may cover health insurance benefits but not expenses related to medical care, such as medical tests and procedures or the cost of prescription drugs. In addition, policies do not typically cover dental and vision care expenses. Instead, individuals covered in group health insurance plans must pay these expenses directly. Additionally, group health insurance policies are often customized to fit individual needs and preferences. Thus, policies may include additional riders and benefits that provide additional coverage or savings for medical expenses.


Group health insurance policies are essential to a company’s health care plan coverage. Offering group health insurance coverage benefits employees, family members, and individual members of a group plan. These benefits make group health insurance policies an economical way to cover employees’ medical expenses and reduce the risk of employee medical emergencies. They also prevent company-funded healthcare expenses from increasing the company’s overall healthcare expenses. To learn more about group health insurance plans, read our blog, ‘ Group Health Insurance: Benefits for Employees and Employers.

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