Coventry Health Insurance of Georgia (GA) | Health Insurance Georgia | Fully Insured Group Health Insurance Plans

Health Insurance Georgia

Fully Insured Group Health Insurance Plans

When it comes to group health insurance plans, there are two main categories of classification. There are self-insured group health insurance plans, and there are fully-insured group health insurance plans. A self-insured group health insurance is one in which the employer pays all of the costs of medical claims and medical services used by their employees. Typically, the employer sets up a trust fund and pays for all medical expenses for their employees out of that fund. Therefore, if no employees require medical services in one month, the employer will not have to pay out any monthly medical bills. A business requires cash flow in order to provide a self-insured group health insurance plan for its employees.

A fully-insured group health insurance plan is one in which the employer pays a health insurance company premiums and the insurance company pays all of the medical claims and costs for the covered employees. The monthly premium for the employer are fixed and consistent from month to month, unless the number of enrolled employees changes.

Health insurance companies that offer fully insured group health insurance plans use pooling to reduce costs. This is when they group, or pool, many different groups of employees from possibly different companies. This helps spread the risks of medical costs among a larger group of enrolled members. Usually small businesses will have their employees pooled with other groups to protect the health insurance company from financial loss. This financial loss could occur if even one employee has a major medical claim.

Either the employer or the employee may be responsible to pay the monthly premiums for a fully insured group health insurance plan. The premiums vary based on the size of the employer and the number of employees. The premiums for each enrolled member of a group health insurance plan will be the same, regardless of health conditions. This is because health insurance companies are prohibited from using current health conditions or past medical history to determine premium costs on group health insurance plans. They are allowed to do that for individual or family health insurance policies, at this time, however. Regardless whether the employer or employees pay the premium, the health insurance company hopes that all of the received premium payments will cover all of the members' medical claims costs.

Employers that have more than two employees but less than 50 employees qualify for group health insurance plans. A business of that small a size would have a hard time coming up with the cash flow required to have a self-insured group health insurance plan for their employees. That is why fully-insured group health insurance plans are more common among small businesses. Businesses can promote health and wellness for their employees, and this may help lower insurance rates with health insurance companies, for group health insurance plan premiums. Encouraging a healthy lifestyle, exercise, and maintaining a healthy body weight are important ways to promote health. Other important issues are avoiding the use of tobacco or alcohol. Businesses that encourage these healthy habits have fewer health-related claims.

For the employee, a self-insured group health insurance plan looks just like a fully-insured group health insurance plan, because under both plans, someone is administering the claims, and paying your medical costs.

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