Health insurance is a convenience for Canadians for a variety of different reasons. Health insurance is not always cheap, but it is still helpful to pay for unexpected medical expenses. The amount you would pay for health insurance is affordable compared to the amount you would end up paying for medical services.
It can be detrimental for people with a history of medical conditions, participate in extreme sports, or physically toil at work to go around without health insurance. One solution to the problem is carrying out an individual health policy, but this has its own setbacks. An alternative solution that does not require you to carry out an individual health policy is a group plan.
Group health insurance plans in Canada are quickly gaining popularity because they are affordable for both employers and employees. Some employers are skeptical of the benefits group plans can offer and how they work. But before we explain how group benefits can facilitate employers and their personnel, let’s get a clearer idea of group health insurance.
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What Is Group Health Insurance?
Group health insurance policies provide insurance coverage for employees in a particular organization. Group health insurance plans cost less than an individual insurance policy because the premium cost is shared between the employer and the employee of the organization. The cost of the premium is divided between the employer and the employee according to agreed-upon terms for all parties.
How Many Employees Must An Organization Have To Qualify For Group Health Insurance?
Group health insurance plans are split into two categories: small health insurance plans and large group health insurance plans. An organization that employs between one and 50 workers qualifies for the small group health insurance plan. A company with more than 50 employees must get a large group health insurance plan.
For small organizations, there should be more than three employees in total, not including the owner. At least one of the employees should not be related to the employer to qualify for a group health insurance plan.
Categories Of Group Insurance Plans
Group insurance plans are categorized based on the number of workers, type of company, or inclusionary. Let’s look at some of these group insurance plans in detail.
Health Maintenance Organization (HMO): Most Affordable Plan
This is the most inexpensive plan for small companies because it limits coverage and services to providers listed in the HMO contract. Policyholders can not get services from health service providers not included in the HMO network. In some cases, policyholders may be able to get emergency care and dialysis within their primary plan’s service area based on their coverage.
HMO policyholders must reside or work in the primary plan’s service area to qualify for coverage. Organizations can nominate a primary care physician to organize their services. The primary care physician refers policyholders to medical specialists within the coverage network.
Preferred Provider Organization (PPO): Best Value For Money
An insurance provider contracts with various clinics, doctors, and hospitals, to establish a network of affiliated providers in a preferred provider organization (PPO) health insurance plan. All of the participated providers agree to deliver services to policyholders based on a negotiated rate. As long as you acquire services from the in-network providers, you will pay less for the health services.
You have the liberty to choose out-of-network health service providers, but you might pay more. This is because out-of-network providers do not acknowledge the negotiated rate set by your insurance provider. The business organization can cater to a panel of hospitals, clinics, and medical service providers instead of a single primary care physician.
On the whole, PPO plans give organizations the most freedom but the premiums will cost more. Consider getting a PPO plan if you expect to pay more for health services in the coming year. Policyholders can easily afford to get consultations from several medical specialists for their satisfaction if their medical condition demands it.
Point Of Service (POS) Plan: Affordable Out-Of-Network Coverage
Point of service (POS) health insurance plans require the organization to nominate a primary care physician for their policyholders. The primary care physician can refer policyholders to out-of-network medical service providers but they will cost more than in-network medical specialists.
The premiums for POS plans are more than HMO plans because it offers out-of-network coverage. This is a valuable facility for policyholders with medical conditions that require medical attention if they visit locations outside of their primary care region.
Difference Between Group Insurance & Individual Insurance Policies
You must incur all of the costs of an individual insurance plan designed for you or your family members. Business owners and employees can agree to share a percentage of the premiums for group insurance plans. Depending on the group insurance plan you and your employer choose, you will pay less in comparison to an individual insurance plan and still get the same benefits.
Some group insurance plans are fully paid for by employers for their employees, but these plans might not be available for new employees. Affordability is another benefit of a group plan for larger families (one spouse and one child or more). An employee with two dependents pays the same as an employee with family coverage for six dependents.
The main drawback of group insurance is that employee benefits are tied to the worker’s employment status. A job loss has a negative impact on health insurance coverage. There are government programs to bridge gaps in coverage, but most of these programs are quite expensive.
Is Group Insurance Mandatory?
Group insurance is a good way to attract and retain new employees with your organization for the long run. But there is no law which mandates an organization to offer all of its employees a group plan. It might not be practical for new businesses with a few employees to offer all of their worker’s group benefits from day one.
A majority of Canadians still expect some sort of health insurance before accepting a job offer from any company. A job offer from a large organization with a comprehensive group insurance plan can be a game-changer for new employees.
Customized Group Insurance Plans For Businesses In Halifax
Insurance companies acknowledge that businesses of all sizes in Canada need group insurance plans according to their business requirements. An experienced group insurance broker can help your organization choose the best group insurance plan based on the number of employees and line of business.
McIver Insurance Halifax provides counsel to businesses from coast-to-coast with 10 or more than 10,000 employees. Schedule a consultation with them today to discover the specific challenges your business can overcome with a group insurance plan.