Group health insurance is a major employee benefit. It provides financial cover to the employees working for a company or organization to meet the expensive hospitalization expenses in case of medical emergencies. Both small and large companies are eligible to provide group health insurance to their employees. It has become an important tool for attracting and retaining talented employees.
Small group vs large group health insurance can be understood with the help of a number of points. Health insurance companies have built group health insurance products targeting small and large groups. From coverage to premiums and other factors, there are many points of difference between the two kinds of group health insurance.
Small Group Vs Large Group Health Insurance
The following points illustrate the specifics of small group vs large group health insurance.
What are small group health insurance and large group health insurance?
The difference in definitions is the basic point of small-group vs large group health insurance.
Small group health insurance is applicable for a company or organization with an employee strength of not more than 50. Thus, if a company does not employ more than 50 people, it is eligible for small group health insurance. This is because a group health insurance policy covering 50 or fewer members is considered a small group health insurance policy.
On the other hand, large group health insurance is applicable for a company or organization having 51 or more employees. In other words, a company must employ at least 51 persons to be eligible for large group health insurance.
How to qualify for small or large group health insurance?
Small group vs large group health insurance can also be assessed on the basis of qualification standards set by IRDAI.
Small businesses are eligible for small group health insurance provided they employ at least 25 employees. Any small business with an employee strength ranging between 25 and 50 can apply for small group health insurance. The insurance company can also have its own rules and regulations to provide small group health insurance. The rules and regulations vary from insurer to insurer.
A business or company qualifies for large group health insurance only if it has employed at least 51 people. The insurance company can also set minimum participation criteria to provide large group health insurance. It varies from one insurer to another.
How do determine group size?
Group size is the main factor in small group vs large group health insurance. The minimum size for purchasing small group health insurance is 25, while the same is 51 for purchasing large group health insurance. The question is how to determine the company’s size concerning employees.
In group health insurance, the term employees refer to full-time employees. Part-time or contractual employees cannot be covered under group health insurance regardless of small or large. Full-time employees work for 45 hours or more for the company a week. Part-time employees work for less than 30 hours a week. Thus, if a company wants to reach the mandatory full-time employee strength to get small or large group health insurance but falls short, it can adjust the working hours of part-time employees to cross the 30-hour threshold to make them full-time employees.
The total number of employees in a company, including the employees, their parents, subsidiaries, and sibling companies can be counted for the purpose of small or large group health insurance.
What do small and large group health insurance cover?
When it comes to coverage, small group vs large group health insurance has no meaning because the coverage benefits provided by both kinds of group health insurance are the same.
Both types of group health insurance provide basic hospitalization coverage, including room rent and expenses incurred on medicines, tests, doctor’s fees, etc. Depending upon the plan, coverage is also provided for pre and post-hospitalization expenses such as diagnostic tests, visits to the doctors, medicines, and more.
Add-ons are offered by both small and large group health insurance policies. These include but are not limited to maternity coverage, critical illness cover, ambulance charges, domiciliary hospitalization, and more.
Family members and dependents of the employees can be included in both small and large group health insurance policies.
What Are the Cost Factors of Small and Large Group Health Insurance?
Cost is a major factor in small group vs large group health insurance The premium of group health insurance is lesser than individual health insurance because the risk to the insurer is divided among multiple persons. Since the risk to the insurer in the case of small group health insurance is divided over a lesser number of people than large group health insurance, the premiums of small group health insurance plans are more as compared to large group health insurance plans.
Age factor works in the same manner in both small and large group health insurance. Thus, regardless of whether you are purchasing small group health insurance or large group health insurance, the more the average age of your group, the greater the premium you are required to pay. This is because the risk of illnesses and consequent risk to the insurers increases with the insured members’ age.
How do you purchase and enroll in small and large group health insurance plans?
You can purchase and enroll in small and large group health insurance by either directly approaching the group health insurance provider or through an insurance agent dealing in group health insurance. The premium paid for the policy term does not change during the term, irrespective of whether you add or delete employees from the policy.
The enrolment process is the same for small and large group health insurance. However, the eligibility criteria differ regarding small group vs large group health insurance
The need to pay annually can be cumbersome for smaller organizations and Vital has been actively working towards beating that. Our affordable monthly subscription plans make it easier for SMEs to offer employee healthcare plans for their teams without worrying about their cash flow or any compromise on coverage.
Now that you know the facts vis-a-vis small group vs large group health insurance, you can check your eligibility for small or large group health insurance.