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Types of Group Health Insurance

Group health insurance plans can fit into the same categories as individual health insurance plans, but there are three types of group health insurance options whether you are a small business or a larger employer:


Fully Insured

This is the most common policy type for group health insurance coverage. Employers pay a premium, of which the employee pays a small percentage, and the insurance company covers qualifying costs.



This type of coverage is when the employer covers all qualified medical costs for employees rather than an insurance company.



Whereas most group health insurance plans are paid with an annual premium, this coverage uses a changing monthly rate based on a company census.

Plan Considerations

Before picking a plan, you will want to make a few considerations to ensure that your business gets the best deal for you and your employees.

Company Size

The more employees you have, especially if you have diversity in age and type of work, the more you can reduce your overall cost.

Employee Risk Factors

The type of work your employers do can increase risk factors and affect the type of group health insurance your company needs and can afford.

Talent Retention & Recruitment

Staying competitive in the marketplace means keeping talent in your business, a deciding factor for many employees will be the employer’s group health insurance and other benefits.

Legal Requirements

There are federal, state, and other regulatory factors that will impact the type of group health insurance your business will need.

Group Health Insurance Plans Requirement

There is no law requiring that a group plan must be offered by an employer, but larger businesses might still face a penalty if they do not. If you have over 50 full-time employees and none receive an individual premium tax-credit or cost-sharing reductions, there is no penalty. If you want to purchase group health insurance for a small business (at least 2 full-time employees) you have a legal right to do so and can access plans through the marketplace. If your small business chooses to offer group health insurance to at least one employee, you will be required to offer it to all full-time employees.

Group Health Insurance Cost

Finding the right group health insurance starts before comparing quotes and by figuring out which type of plan is best for your business. Each type of group health insurance plan has different factors impacting the cost, let’s take a look at each of the three main types of group coverage and what impacts their cost:

Fully Insured

  • The number of employees and the type of work they do
  • Employee health
  • Levels of coverage
  • Past number of claims filed


  • Company size: typically, this policy works better for larger companies
  • Claims allowances
  • Stop-Loss coverage or other add-ons to limit an employer’s risk


  • Claims allowances
  • Additional fees and supplemental coverage costs (such as Stop-Loss)
  • Employee risk factors

Related Product Offerings

Insurance Exchanges

Ansay & Associates is here to help you navigate health insurance on the exchange and help you choose the right plan. Click to learn more about health insurance exchanges for businesses.

Insurance Exchanges

Benefits Plan Consulting

The agents at Ansay & Associates are committed to helping clients with selecting and administering benefits at the best possible cost. Click to see how utilizing benefits plan consulting is a necessity.

Benefits Plan Consulting

Individual Health Insurance

Individual health insurance plans come in all shapes and sizes. Learn about the types of individual health insurance offered by Ansay & Associates and what you want to include in your plan.

Individual Health Insurance

Frequently Asked Questions

Answers to Frequently Asked Group Health Insurance Questions

How can a small business get Group Health Insurance?

Group health insurance can be purchased directly from an insurance company or through a marketplace. Most small businesses will not be able to self-fund.

Does Group Health Insurance cover pre-existing conditions?

This is one of the most common questions received by Ansay, so you are not alone in your concern. Group health insurance plans, like all others, cannot deny coverage for pre-existing conditions.

Can I cancel my Group Health Insurance at any time?

If your group health insurance premiums are deducted post-tax, you may cancel at any time. Unforeseen circumstances do often arise, but it is strongly recommended you consult with an advisor first regarding your best options.

Are 1099 employees eligible for Group Health Insurance?

Typically, 1099 employees are not eligible for group health insurance. There are some scenarios where a small business may count 1099 employees and qualify for group coverage.

What is Group Health Insurance?

Group health insurance is often referred to an employer health plan and is offered to employees as part of a benefit package. Group plans vary in what is and is not covered and how much an employee must pay in. Groups besides employers may also be eligible.

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Are you and your company exploring better options for group health insurance coverage? Ansay & Associates have experience navigating all your options to ensure your company gets the best coverage at the best price.

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