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Employer group health insurance is an insurance coverage that is purchased by the employer and offered to the employees and sometimes even their family members. It’s an added benefit of employment offered by many employers and because insurance premium is generally quite high to bear individually, many employees are greatly benefitted by Employer group health insurance

Employer group health insurance can come in various packages and are customized as per the business size as well. Also, like in personal insurance, the coverage and the premium is different. For instance, the Employer group health insurance policy suitable for a small business employing less than 10 employees will not be suitable for a business that has multiple offices and employs a few thousand employees. Additionally, a business where salary is low, may go for a more basic policy then a multi-national which may need to buy overseas Employer group health insurance for its employees.

For small Employer group health insurance providers, the federal law imposes some restrictions. But there are various differences at the state level. While some states mandate that Employer group health insurance cover has to extend to all employees, irrespective of any pre-existing medical condition like heart disease, diabetes etc; some states allow the insurance providers to exclude employees based on pre-existing conditions.

Similarly, premium calculation also differs from state to state. While the majority states use a method called medical underwriting to calculate costs, a few other states use “community rating” and “modified community rating” to calculate premium. Medical underwriting is a process whereby Employer group health insurance premium is calculated based on the employees’ health history. Community rating, on the other hand, is a process whereby employees of a certain region or “community” is charged a flat premium rate; modified community rating allows for changes based on sex and gender within the community

Large employers have different laws when it comes to employer group health insurance. For instance, employer group health insurance applies to all employees of a large business. The premium rates are determined by medical underwriting as a rule. But rather than going through medical history of employees at an individual level, large employer group health insurance providers calculate the premium based on the company’s claims history.

As in the case of individuals, employer group health insurance is managed by both privately owned as well as state insurance providers. Large companies are also known to self insure i.e. it manages the health benefits of its own employees by having its own policy. In that case, the policy will be regulated by the Department of Labor.

If you are a business owner and are thinking about purchasing an Employer group health insurance, then you should look first into what your State law mandates and then do some research on which insurance provider has the best service as far as claims from covers from other businesses go. While it may not be cheap, but going for a solid reputed company that is known for its good record is good for your employees as well.