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- Group health insurance is sometimes cheaper than individual health insurance.
Usually, it comes with less restrictions compared to individual health insurance and
coverage is higher, out of pocket expenses are lower.
However, all that really
depends upon the size of the group. If you are just husband and wife as 2 employees,
you are unlikely to get any advantages in group insurance compared to individual
insurance. Whenever any insurance company provides any health insurance either to
group or individual, they look into the overall deal whether they are going to make
any money in it. If there is a large group of employees and only a few with medical
conditions, most likely that group will be accepted as insurance company will still
make money overall. However, if the group is very small with mostly sick people,
entire group may be rejected as it would be overall a loss for the insurance company.
If healthy people in the group do not wish to have the group health insurance, they
are essentially making it difficult for other members to get the insurance.
- With group insurance, as long as the group meets the initial enrollment requirements
of the insurance company, all new employees will have guaranteed coverage. No one will
be declined for coverage due to health reasons which might happen many times while applying
for individual health insurance.
Also, a US person returning to the USA can be declined by US domestic health insurance companies
if he/she has any serious health conditions such as diabetes, cancer etc, if he/she had
individual health insurance overseas. However, if the same person were on group insurance, when
returning to the US may apply for HIPAA (Health Insurance Portability and Accountability Act)
plans and be covered on that plan forever. Even though such plans are expensive, at least they
can be insured.
- Individual health insurance may have "riders" or "waivers" on various pre-existing conditions.
In other words, in order to get the insurance, the person will have to sign an agreement indicating
that those conditions will not be covered. Group insurance will not put any such waivers on individuals.
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Employer does not have worry about someone not having health insurance. If everyone is enrolled
in an individual health insurance, some people might discontinue or forget to renew their insurance.
On the other hands, all enrolled employees are covered all the time in the group health insurance.
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There is less paperwork and accounting with group health insurance for the employer.
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