What Group Benefit Plans Offer Their Members
A group benefit plan is a form of insurance that covers multiple people. These individuals need to be part of a group such as those working for a particular company, members of the same union, or in a professional association. These individuals form a group for reasons other than collectively wanting to purchase insurance. Because they are grouped together the insurance company can offer lower rates than otherwise. The entity looking for insurance can shop around and get better rates because they are looking to buy for a large number of people.
The Wikipedia page on group benefit plans, found here, shares that these are not just about health insurance. Many group benefit plans also offer life insurance, for example. This is an additional benefit to offer people in the plan and a way for employers to entice people to work for them. One of the big benefits is that getting life insurance coverage through an employer, union, or professional association is that the rates will be a lot less than on the individual market. The downside is that if you leave the company, union, or professional association you lose your life insurance coverage.
There are three main characteristics of group benefit plans. The first is that they group people together who have an association in common that isn’t primarily designed to seek insurance. The second is that administrative costs are kept down as one entity, the master policyholder, keeps any required documentation and who also works with the individual members. Third, these types of insurance plans offer lower rates than individual plans, often substantially, because the insurance company’s actuaries have determined that the number of claims will be lower than on the individual market.
One of the main benefits of group benefit plans for members is that the amount they pay for the insurance is not determined by their individual risk factors unlike on the individual market. Everyone in the group pays the same whether they are younger and healthier or older with some medical issues. Pre-existing conditions don’t prevent a person from getting coverage, for example, and where you live also isn’t a factor.
These types of plans exist nationwide such as group benefit plans Scottsdale AZ. They are purchased through insurance agents, many of whom specialize in selling these types of policies. The insurance agent will work with the company, union, or professional organization in order to obtain quotes and find the best policy to suit the needs of their members.
While many group benefit plans are a bit antiquated in regards to keeping up with technology this is starting to change. This article shares how many Canadian employees, for example, would like to have virtual healthcare options available to them. Two out of three would like to have access to virtual care options inside of their group benefits plan. The article states that insurance companies will need to adapt to allow people to virtually access a healthcare provider, such as a doctor, in order to remain competitive and with the times.