Group health insurance—sometimes called employer-based coverage—is a type of health insurance plan offered by an employer of a member organization. Members of a group health insurance plan usually receive coverage at a lower cost because the risk to the insurer is distributed across multiple members.
Under the Affordable Care Act (ACA), businesses with 50 or more full-time employees must provide health insurance to full-time employees and dependents under the age of 26 or pay a fee. Insurers are also required to provide group coverage to organizations with as few as two employees. Some states allow self-employed individuals to qualify for group coverage plans as well.
Group health insurance plans are selected and purchased by companies or organizations and then offered to employees. In most states, a group insurance plan is required to have a 60% participation rate, though some states’ minimum rate is higher or lower.