What is 'group health insurance'?

Group health insurance refers to a health insurance plan that is provided by an employer or a specific organization to a group of people, often employees or members of the organization. This type of insurance typically offers several advantages, including lower premiums than individual plans, since the risk is spread across a larger pool of participants. Employers may subsidize part of the premium costs, making it more affordable for employees.

Unlike individual health insurance, which is purchased by a single person and underwritten based on their health status, group plans are generally underwritten based on the overall health of the group, which can lead to more favorable coverage terms. This model encourages employers to offer health plans as a part of employee benefits, thereby promoting collective health coverage among workers.

The other options do not accurately capture the essence of group health insurance. For example, a plan that covers only government employees or an individual health insurance policy are distinctly separate from the concept of group health plans linked to employers or organizations. Additionally, plans that pay limited amounts for medical services are not characteristic of the typical benefits structure of group health insurance, which is designed to provide comprehensive coverage comparable to individual plans.