We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is Group Insurance?

Michael Pollick
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Group insurance is a health care coverage plan in which individual employees or members are included under one master policy owned by their employers. Because the plan has so many contributors, the policy often provides coverage for more services at a much lower cost per participant. This type of insurance may be provided by other organizations besides for-profit companies. Labor unions, churches and other service groups can also obtain group insurance for recognized members and possibly their dependents.

Individual members of a group insurance plan receive insurance certificates which demonstrate their eligibility for benefits. If the master policy held by the employer requires participation in an Health Maintenance Organization (HMO), then individuals are also registered as members. Other group policies may be associated with major medical groups such as Blue Cross/Blue Shield. A major medical policy may or may not restrict an individual's choice of primary physician and specialists. HMO policies often require a patient to use a specified physician, who must approve any visits to eligible specialists.

Financing for a group insurance policy is commonly a flexible payroll deduction, although some companies will absorb the entire cost of the policy as a benefit for employees. As with many insurance policies, however, the cost of premiums can rise significantly without warning. If a few participants receive expensive treatments for serious medical conditions, the rest of the group may have to absorb the higher premium costs over time. Group insurers don't always require physical exams before issuing a master policy, so some participants may benefit from treatments for pre-existing conditions.

Benefits from group policies can vary widely from company to company. Almost all policies cover emergency and routine medical procedures such as regular doctor's appointments and hospital treatment for accidents. Most cover extended care in hospitals or rehabilitation centers. However, the insurance may or may not cover the employee's spouse or dependents. Some offer assistance for vision care or dental work, but coverage may be limited to specific procedures. Mental health needs may also be covered under group insurance. Prescription drug expenses often fall under group benefits, but most likely with a co-pay provision. Under a co-pay plan, the covered individual must pay an established price out-of-pocket for name brand and generic medications.

Group insurance is definitely more affordable than a similar number of individual policies, but there are a few drawbacks. Some members find their choices of physicians and treatments very limited under an HMO insurance plan. Even major medical plans can restrict the list of approved physicians, often called the PMD (preferred medical doctor) policy. Employers who fear large increases in premiums may take an unusual interest in their employees' private health issues. Companies may suddenly implement stringent 'no smoking' policies or strongly encourage other preventative health care programs. Some may find this interest in their personal health to be intrusive.

Many employees see group insurance coverage as a major perk for faithful company service. The premium payments are usually deducted automatically and pay for themselves after one typical trip to the emergency room. Extended coverage for spouses and dependents also bring peace of mind and a feeling of security.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Michael Pollick
By Michael Pollick
As a frequent contributor to SmartCapitalMind, Michael Pollick uses his passion for research and writing to cover a wide range of topics. His curiosity drives him to study subjects in-depth, resulting in informative and engaging articles. Prior to becoming a professional writer, Michael honed his skills as an English tutor, poet, voice-over artist, and DJ.
Discussion Comments
By anon990688 — On May 05, 2015

So is group health insurance generally offered through businesses or can you get them privately? I think that this would be a good option for me since I have twelve kids. It would cost a lot of money to get individual policies for each one of them.

By anon344220 — On Aug 07, 2013

What does the cost of underwriting mean?

By anon100063 — On Jul 28, 2010

The above definition is not a definition of "Group Insurance", but rather a definition of only one type of group insurance, specifically, group health insurance.

By anon6020 — On Dec 13, 2007

what is group insurance & its types?

Michael Pollick
Michael Pollick
As a frequent contributor to SmartCapitalMind, Michael Pollick uses his passion for research and writing to cover a wide...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.