In this article we will explore the reasons that motivate employers to get group health insurance for employees and we will look at the advantages and Disadvantages of both angles.
Health insurance group VS private health Insurance
Perhaps the most significant other distinguishing characters of the insurance group is the substitution of a group of loans for each individual. In this case, there is no evidence of the individual that there is no confidence is normally required, and the level of benefits can be substantial with little, if any, limitations are important.
The group of reapers normally not concerned with the health or aspects of the other hidden from any particular individual. On the contrary, aims to gain a bunch of life of the individual or, what is even more important, a collection of groups like the life that can be predicted which will produce mortality or morbidity.
If the number of groups that enough of the life obtained, and if these groups are fairly homogeneous in nature, then that can be predicted or morbidity rate will be. The bottom line is that the group becomes a unit of the bear, and the principles of insurance can be applied to it just as in the case of the individual. To assure that the group obtained will be quite homogeneous, the process of acceptance in the group insurance aims to control the choice of harm by an individual in a group.
In the insurance group loans, then, some important features should be present that either inherent in the nature of the group itself or may be applied in a positive way to avoid the choice of the enemy seriously like:
Insurance incidental to the group: the insurance must be associated with the group; that is, the members of the group must come together for some purpose other than to obtain insurance. For example, the insurance Group provides employees of the employer provided may not be a feature that motivates the formation and existence of the group.
The flow of people through the group: there must be a stable flow of people through the group; that is, there must be an influx of new life young into the group and the flow out of the older group and disturbed life. With a group of employees who are active, it may be assumed that they are in average health.
Automatic determination of advantages: insurance group often requires an automated basis to determine the amount of benefits on an individual’s life, which are beyond the control of the employer or the employee. If the amount of profit taken completely optional, it will be possible to select against the insurer because they are in poor health will tend to ensure the strict and healthy may be inclined to minimum coverage.
Such a mechanism of groups have evolved, however, insurers have responded to the demands of the market, especially a large employer, for spasticity more in the selection of advantages. This flexibility is usually expressed in the number of options of life and health that exceed the basic coverage provided by the supervisor and in the form of financial health.
Also, the cafeteria is a popular plan allows employees of participating to choose among a wide range of the advantages of using the allowance is determined from the funds of the company. The individual chooses, the subject on the certain basic coverage required, the Combination of benefits that best meet the needs of the individual.
Minimal participation by the group: control the little other is the requirement that substantially all of the people who qualified in the particular group will be covered by insurance. In the plan in which the employee pays a portion of the premium (contribute), generally at least 75 percent of the employees eligible to join the plan if coverage becomes effective.
In the case of the non-plan of the continent, participation is 100 percent necessary. By covering a large part of a specific group, the insurance companies get protection against most of the life below the standard. In cases where the employee refuses insurance for religious or other reasons that do not involve the elements of Selection, this rule is relaxed.
Third parties share the cost of: a portion of the cost of the group ideally should be borne by the employer or third parties, such as unions, or trade associations. The plan of the salary of the employee non-continental simple, and it gives the employer full control over the plan.
This provides insurance of all employees who qualify and thus, eliminate the difficulties in dealing with the approval of some of the employees that is sufficient to meet the requirements of participation. Also, there is no problem to distribute the cost among a variety of employees, such as in the plan of contributors.
Plans that contribute usually less expensive for the employer. Therefore, with employee contributions, the employer tends to regulate for the protection that is adequate for the employees. It can also be argued that, if the employee contributes to his insurance, he or she will be more impressed with the value and will appreciate it more. On the other hand, the plan has a number of disadvantages. Its operation is more complicated, and this time, increase the cost of remote administration.
Every employee should agree to contribute to his insurance, and as previously stated, a minimum percentage of the group that is eligible to be approved to enter the settings. New employees entering the business should be informed the right of their insurance.
If this plan provides contributions, the employee may not be eligible for insurance until they have been with the company for some time. If they do not agree to be encompassed in the plan within 31 days, they may be required to provide evidence of instability. Some of the non-plan of the continent also has the period of this experiment.
The organization of the efficient administration of: a the organization of a single administration should be able and willing to act on behalf of the group of insured. In the ordinary case, this is the employer. In the case of plan contributions, there must be a simple method that is simple enough, such as payroll deduction, where the owner of the policy can collect premiums.
An automatic method desired for both the perspective of administrative and panties. Some control of meaning kripting typically used in the insurance plan of the group, but previous discussions allow the award of the theory of editing the group. This discussion is applied in a group with a large number of employees.
Most of the group, however, is not large. Group size is a significant factor in the process-admission process. In the plan smaller, more stringent practice spelling with regard to parts of the harm that is used. This may include a lack of provisions of the contract liberals, the question of the health status of a simple, and in some cases, detailed individual members of the group.
Group policy: the characteristics of both insurance group is the Use of Group Policy (contract) which are held by the owners as a group policyholder and the booklet-certificate summary other than insurance held by the plan participants. The certificate provides information about the provisions of the plan and the steps that are necessary to the claim file.
The use of the certificate and the contract of the Master is one of the economic resources under the approach of the group. The main contract is a document that detailed regulate the contractual relationship between the owner of the contract group and the insurance company. The insured person under the contract, usually the employees and their heirs, not really a party to the contract, although they can impose their rights as a third party as beneficiary. Four party relationship between the employer, insurer, employee, and dependence in a plan insurance group can create a number of problems which interesting and unusual that is common only to the insurance group.
Lower cost: the third feature of the insurance group is usually protection at a lower cost than available in individual insurance. The nature of the group approach permits the use of the mass distribution and method of administration of mass that is able to economy operation are not available in individual insurance.
Also, because of the insurance group does not usually bear on an individual basis, the premium is based on the Actuarial valuation of the group as a whole, so that individuals who are given healthy can probably buy insurance at a lower cost. The company subsidy cost is a critical factor in the design group insurance. Possible savings are most significant in the cost of insurance marketing group lies in the fact that the Commission group absorbs most of the small amount of premium than the commission for an individual contract.
The marketing system membebaskas agent or intermediary of the many duties, responsibilities, and expenses typically associated with selling or serving individual insurance. Because a large premium involved in many cases the insurance group, the commission rate is considered lower than that of the individual contract and is usually rated low as a premium increase.
Some agreement of the buyers of insurance directly with the insurance company and the commission eliminated. In this case, however, the cost is often paid to the consultants involved. The nature of the administrative procedure allows to simplify the technique of accounting. The mechanism of collection of premium less involved, and the procedure returns experience is considerably simplified because the id there is only one party with whom to deal with as the owner of the policy group.
Of course, the issuance of a large number of individual contract is avoided and, because of the nature of the selection group, the cost of medical examination and inspection reports be minimized. Also, the regulatory filing and other requirements are minimized. In the beginning