What Is Group Health Insurance & How Does it Work?
Group health insurance is a vital component of employee benefits, providing coverage for a group of individuals typically within an organization. This type of insurance is designed to offer comprehensive health coverage to employees and their dependents. Understanding how group health insurance works is crucial for both employers and employees. Firstly, group health insurance operates on the principle of risk pooling. The larger the group, the more diverse the risk, which allows insurers to spread the financial burden among many individuals. This makes it more cost-effective compared to individual health plans. Employers usually sponsor group health insurance, covering a significant portion of the premium costs. In turn, employees may be required to contribute a smaller percentage of the premium through payroll deductions. This shared financial responsibility fosters a sense of mutual benefit, aligning the interests of both employers and employees in promoting a healthy