A group health insurance policy is purchased by an employer (or employee organization) and is offered to eligible participants, and to eligible dependents of participants. There are several types of group health insurance plans including HMO, PPO, and EPO.
Group health insurance plans are designed to be more cost-effective for businesses. Employee premiums are typically less expensive than those for an individual health plan. Premiums are paid with pretax dollars, which help employees pay less in annual taxes. Employers may pay lower payroll taxes and deduct their annual contributions when calculating income taxes.
Health insurance helps businesses pay for health care expenses for their employees. When you pay a premium, insurance companies pay a portion of your medical costs, including for regular doctor checkups or injuries and treatments for accidents and long-term illnesses. The amount and services that are covered vary by plan.