Group Health Insurance Plan
Categories: Insurance, Company Management
Buying in bulk saves money. Buy toilet paper a roll at a time and it might cost you $1 each. Buy a package of 400 rolls at Big Lots and you can get the whole thing for $200...only 50 cents a roll.
The same principle holds for health insurance. Buy in bulk, save money.
That's the concept behind a group health insurance plan. By signing up a bunch of people at once, the insurance company is willing and able to give everyone a break on their premiums.
When you think of getting health insurance through your employer, you're thinking of a group health insurance plan. As long as the company you work for has enough employees, it can get a lower rate on the premiums compared to what each person could get if they bought insurance separately.
The downside is that you might not get as much choice. The insurance company may offer the group a few plans they can choose from...or everyone has to just take the one plan offered. You can't mix and match or optimize a plan that fits you best.