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What is a large group health plan?

A large group health plan is coverage for a group of members, most commonly comprised of employees who work for a company. By insuring a large pool of people, a large group health plan spreads an insurer's risk across many individuals. This activates cost savings for both the insurer and for the policyholders.

These plans include a variety of features depending upon the insurance provider and the needs of the company or organization purchasing the plan. A high participation rate by employees is usually needed to make the plan viable. Employees often have the choice of declining or accepting coverage, and they might also have options for different levels of coverage. These plans are not available for individuals.


Learn more about large group health plans

When do I need to be aware of large group health plans?

An employee who works for an organization will often receive information on the enrollment into a large group health plan. At this time, the employee should look at the features and costs of the plan to decide if it is a good plan. In nearly all cases, a large group health plan will have many benefits for employees. Many companies offer a choice of several group plans.

What is important to know about a large group health plan?

By spreading risk across a large group of members, a group health plan often delivers savings on both premiums and payment of medical claims. These plans usually provide better value than a health plan purchased by an individual on the open market. There are some other important items you should know about a large group health plan:

  • Large group health plans became more common in the 1940s due to several factors.
  • Most plans are provided through an employee's company.
  • Some group health plans are available to members of an association or organization.
  • The plans usually provide coverage for the employee, family members, and other dependents. 
  • Most states require 51 or more employees for a large group health insurance plan.
  • At least 101 employees are currently required for a large group health insurance plan in the four states of California, Colorado, New York, and Vermont.