In-Depth Guide to Group Insurance

Small group insurance benefits are an important part of today's compensation packages for employees of even the smallest companies. But health insurance isn't for business only: almost any small group of 2 to 50 people can qualify for group health insurance, often at a substantial discount for individual employees over similar plans offered individually.


This guide:

  Explains how small business health insurance works

  Helps you design a small business health insurance plan

  Advises on the options availble to the self-employed

  Outlines group insurance regulations in effect in your state

Get a free quote for your small business

You can get an online quote, or speak to an agent in your area who can help you decide on what options are best for your small business.


Start by telling us what state you are in:

In most states, only businesses with 2-50 employees qualify for small business health insurance. If you are self-employed and no one else works for you, look into buying health insurance for self employed individuals.

How group health insurance works

A small business health insurance plan provides coverage for its members with rates calculated on a kind of bulk rate for the group. Employees may be able to add their own policy riders and have additional coverage to customize the policy to meet their specific needs, such as adding or subtracting optical or family care, but the basic policy format will remain the same for the whole group.

Likewise, though small business health insurance comes in a variety of shapes and sizes (e.g. fee-for-service, HMO, PPO, POS, all of which are explained in-depth on our pages concerning the various policy types), the format that you choose for the company will apply to all the group members. It is possible to purchase a group indemnity policy, but the managed care plans are more affordable for every pay scale and, therefore, are much more common.

Health insurance premiums are calculated differently both from state to state and from company to company. The cost of a group health insurance plan is based on the characteristics of each individual member of the group, including, but of course not limited to:

  age
  health status
  occupational hazard
  business and/or residential location
  tobacco use

Employees of businesses that offer group health insurance are not compelled to join the plan, but the group must maintain a minimum number of insured (as few as 2 people, depending on the policy) to guarantee coverage. Remember, though, that an individual purchasing the same type and amount of coverage will pay less in a group than if that same person purchased it individually.

Next: Take an in-depth look at how to design an excellent small business health insurance program for your company.