Why are group plan alternatives troublesome?
Health is wealth has tested true in recent times. Organizations look after the health of their employees for a well-rounded support system. There may be times when uncalled for health issues may come up, and in such times a health plan can save a person from a lot of turmoil. However, various other options can opt for instead of group plans that companies usually offer. However, choosing an option from group plan alternatives can be overwhelming. Here is a quick insight that will help make the right choice. A group plan for health is simply a plan offered to a related group of people instead of individuals. The group of people could be employees of an organization or members of a family. Usually, organizations opt for group plans as it is faster and easier to purchase. Companies own group plans. Hence, they choose the service provider and the premium that needs to be paid for it. Companies and institutions like banks and business groups opt for group plans because it balances out the high-risk and low-risk employees and averages the premium. Pros and cons of the group plan  Pros  The essential operation of group plans is to receive an average premium from all its policyholders. Employees with a high risk of claiming the policy pay the same amount as the employees who are unlikely to redeem it. Hence, it is favorable for companies to get quick policies without getting into the hassles of individual premiums and policies. Some of the benefits of group plans are as follows. It is safe for both employees and employers There might be a provision for employees to include their family members in the policy. The network hospitals provide cashless services. It is tax saving for both employers and employees. It is more economical than individual plans. Cons  Apart from the above pros, group plans can be troublesome in specific scenarios. The policy lapses on leaving the organization. Smaller companies may not have the price benefit on the premium due to less number of employees. The liability is inapplicable on retirement. The employer may choose to disrupt the plan. Group plan Alternatives  To avoid the above consequences, there are other group plan alternatives that an individual can opt for. These alternatives can be chosen in place of or along with a group plan. Some of them are-  Self-Funded plan High deductible health plan Individual coverage HRA  Though group plan alternatives offer plenty of options and flexibility to personalize as per need, they are still expensive compared to group plans. Yet, it may be a better choice with low health risks to go for alternatives as it can save them a considerable amount on premium. Conclusion  Compared to group plans, its alternatives are pricey and take a while to process the claim. In case a person has a pre-existing illness, group plans can provide coverage for that as well. The most significant advantage is that group plans are activated within a day and faster to redeem the claims.