4 Things You Probably Didn’t Know About Group Health Benefits

by | Nov 14, 2022 | Financial Tips | 0 comments

Have you ever read through what your group health benefits cover? Many people haven’t looked at the specifics of their group health benefits. They also may not have considered what happens if they leave their job. In this article we outline 4 things you probably didn’t know about your group health benefits and why an individual policy might be beneficial for you.

What do group health benefits cover?

First, let’s talk about what group health benefits cover. While group health benefits vary by company and coverage level, there are a few things they have in common. Most plans will include some life insurance, or optional life insurance, typically in the range of $100,000-$500,000 or a multiplier of current salary. Almost all plans will have an Accidental Death and Dismemberment provision. Recently, insurers have also started offering Critical Illness Insurance as part of group contracts, up to $100,000 coverage. 

Some other benefits may include Disability Insurance, Health and Dental Insurance, and Travel Insurance. There may also be non-insurance benefits such as pre-paid access to counselling services. 

4 things you might not know about your coverage

1.No individual risk assessments

Group health benefits may be a great option for you if you have pre-existing medical conditions. This is because the risk assessment is not done individually, but based on industry, geography or employee composition. Essentially this difference means employees within the group can obtain coverage without going through underwriting (a.k.a. individual risk assessment). That means applicants are seldom declined coverage, regardless of medical history. 

That being said, there are times when applicants may have to undergo individual assessment, such as in the case of late applicants, optional insurance, or when applying above the basic amount of Life or Disability coverage.

2.Lack of flexibility

It’s important to recognize that a big difference between group and individual coverage is how the contract is written. In group insurance, the contract is between the employer and the insurer. That means as a plan member, you are not party to the contract. As a result, you will have little influence in how the plan is implemented or what coverage is in force. 

3.Leaving your job (Conversion Privilege)

Because you are not party to your group health benefits contract, your options may be limited if you decide to leave, or are terminated from your job.

Some group insurance contracts have something called a “conversion privilege.” Conversion privilege essentially makes it possible to continue certain coverages of your group plan without individual assessment. However, you’ll need to be prepared for your new plan to be generally more expensive than it was when you were part of the group contract.

4.Difficulty getting individual coverage

If you leave your job and decide you don’t want to, or are unable to convert your group health benefits, you may have limited options available to you. Consider if you were to develop a medical condition such as cancer while on your group health benefits plan. At that point if you left your job, or wanted to top up your coverage with an individual policy, it may not be possible, or it may be much more expensive. 

Benefits of a individual policy

There are definitely benefits to an individual policy that covers all of your needs so you don’t have to rely on your group health benefits. They are also more portable and can be adjusted to fully cover the needs of you and your family. Whatever happens with your job, or your health, this guarantees your health benefits are secure. 

It’s also a policy that you can control outside of a group benefit. So, if you are in good health, you may save money compared to the premiums set by your industry, geography or employee composition.

At ACN Financial Group, we encourage individual health benefits because of the security and peace of mind it offers our clients. To discuss whether your group benefits provide adequate coverage, contact us today at ACN Financial Group. We’d be happy to help you find the best plan for your needs.