Group health insurance

Group health insurance

Appeal of employer-sponsored plans is obvious

September 29, 2010
State exchanges
What is an exchange?
Shopping the exchanges
Consumer protections
State exchanges
Essential benefits in ACA
The federal exchange
Will you get a subsidy?
Will you owe a penalty?
Cost-sharing subsidies
Types of exchanges
Exchange FAQs

Price check
health insurance
near you

Of the U.S. citizens who have health coverage, the vast majority – nearly 60 percent – secure that coverage through group health insurance, and then – typically – through an employer-sponsored health plan. Even while employer-sponsored coverage has been declining – down from 64.2 percent in 2000 – millions continue to take advantage of the coverage for reasons that are easy to understand:


First, the employer typically takes responsibility for a significant portion of the health care expenses. A recent Kaiser Family Foundation survey of employers survey of employers found that in 2008, premiums for employer-sponsored health insurance climbed to $12,608 a year for family coverage. Of premium costs, employees paid less than a third – or about $3,354 – from their paychecks.

Ease of enrollment

And while cost is appealing, enrollment is perhaps even more appealing. Group health plans are guaranteed issue, meaning that the insurance company must cover all applicants whose employment qualifies them for coverage – and can’t rate up increase the cost for an applicant with a pre-existing condition.

Note: Nearly a dozen states have a provision for the self-employed to qualify as a “group-of-one,” meaning that they, too can purchase a guaranteed-issue plan.

The reason: In a group plan, the risk is spread across all the participants in the group. In smaller groups, where the risk is more thinly spread, a serious illness to one employee can make the entire group more expensive to insure.


Because large groups can use their size to negotiate better benefits, employer-sponsored plans typically are able to include a range of plan options. In addition to an HMO or PPO plan, employees may have the option to purchase insurance for dental, life, short- and long-term disability.

To be enrolled or not to be enrolled

Do most employees enroll in available plans? As with any health plan, higher premiums result in lower enrollment. But before opting out of an employer-sponsored plan, remember that it’s essential that you have health insurance for you and your family. More than 60 percent of bankruptcies in the United States are the result of medical bills. In addition, over a recent six-year period, an estimated 137,000 Americans died due to a lack of health insurance. They either received too little care or received that care too late.

What happens if you lose your job?

If you lose your job, an obvious option will be COBRA. The Congressional Omnibus Budget Reconciliation Act of 1985 allows laid-off workers to continue to purchase the health coverage from their employer-sponsored plans for a defined period – typically 18 to 36 months – after they leave their employers.

Tags: cobra, group health insurance

About Steve Anderson

Steve Anderson

Steve Anderson is editor and content manager for, where he works with a talented team of health policy writers. Anderson is a writer and editor with two decades of communications experience that includes previous lives in print journalism, corporate communications, and public affairs.

Search within articles

Learn all about health insurance

what is cancer insurance

Will you need a cancer insurance policy?

While the Affordable Care Act has greatly expanded coverage for millions of Americans –…

prescription drug local search

Save on prescription drugs close to home

The good news is that, whether you are insured or uninsured, anyone can utilize a few…

missed Obamacare enrollment deadline

Miss open enrollment? You’ve got options.

Now that open enrollment has ended – and the extensions have passed in most states –…

Will you owe an Obamacare Penalty?

Will you owe a penalty under Obamacare?

If, for whatever reason, you decide not to purchase coverage in 2014, you can use the…


Qualifying events that can get you coverage

Even if you missed the general open enrollment, you could still have an opportunity to…

Obamacare's essential benefits

Health reform’s 10 essential benefits

The ACA specifies ten benefits be included in all health insurance plans sold on each…

STM: Short Term Medical

Short-term health insurance

Now that the 2014 Obamacare open enrollment period is over, a short-term policy will…

Health insurance for college students.

Student health insurance

Before college starts, students and their families need to ensure that their health…

ACA owners manual

Getting the most from your new insurance

The media have focused on the cost of the monthly premium. How much would you contribute…

all posts

See all 45 articles

Related terms


COBRA is the Consolidated Omnibus Budget Reconciliation Act of 1985, federal legislation that allows you – if you…

group health insurance

Coverage through an employer or other entity that covers all individuals in the group. Read more about group…