The vast majority of American businesses offer health insurance benefits for qualifying employees through group health plans. Under a group plan setup, costs are shared by both employers and employees, allowing participants to receive crucial health insurance benefits at a fraction of the cost they would pay if they bought their coverage alone.
Still, group health benefits are not free to participating employees, and when your employer offers you benefits, you usually must pay something out of pocket for both your plan itself and any ensuing care. Here’s what to expect.
The Structure of Group Health Plans
When an employer chooses to offer a group health plan as part of their benefits package, then they are the party that buys the plan from the carrier. They then allow qualifying employees (usually, at least everyone who works for them full-time) to enroll as participants in the plan. The employees can also choose to enroll qualifying family members and dependents on the plans as well.
By providing health insurance, an employer ensures that employees can receive the health care they need, not just to treat illness but also to stay well in general. It has its kickbacks for the business, on one hand, because well employees are the ones who often perform most optimally. Additionally, statistics show that strong benefits plans are key contributors to strong retention rates.
For employees, group plans have cost benefits as well. In the case of most plans, the employer pays a portion of the premium, while the employee pays the remainder. That often reduces the out-of-pocket cost to employees, and it allows them to get coverage for a cost that they might not be able to afford alone.
What You Will Pay
Group health plans do not equal free health care. Employees will contribute a portion of their paycheck towards the plan’s premiums, first of all. Additionally, even once they have coverage, they will share a portion of their health care costs. Usually, they must pay:
Co-payments: These are nominal fees that you might have to pay your doctor at the time you go for an appointment.
Deductibles: Most health plans have deductibles, which are a cost you agree to pay first before your plan pays. For example, the plan might have a $3,000 deductible. You therefore will pay $3,000 out-of-pocket for care before your plan provides any coverage. However, most major insurers waive deductibles on certain essential care services.
Coinsurance: You might have to pay for a percentage of the care. For example, the plan might pay 70% of the cost of an MRI, while you will pay the remaining 30%.
All plans vary in which cost sharing mechanisms apply to which services. Additionally, most plans will include a provider network, which outlines the physicians who accept that particular plan as a form of payment. As long as you see a provider within your network, you will pay the most optimized coverage for your costs.