Common benefits of group health insurance coverage include the tax benefits for employees and the payments that employers usually contribute toward the premiums, reports the National Association of Health Underwriters. By law, insurance companies cannot deny small or large businesses or individual employees coverage due to pre-existing health conditions. Federal law also stipulates that group plans must provide participants with important plan information and must temporarily continue to cover employees after they lose their jobs.
In group health plans, employers often pay half or more of the costs of premiums for employees, explains the National Association of Health Underwriters. Both the employer and employee contributions are tax free. Insurance companies must accept small employer and large-company applications for group coverage regardless of claims history, and must renew the contracts annually unless the employers do not pay their premiums or they commit fraud. Large group-health plans have the option of either self-funding their plans or funding them through insurance companies.
The federal Employee Retirement Income Security Act, or ERISA, protects group health-plan members by requiring plan administrators to provide information about plan funding and other features, according to the U.S. Department of Labor. It also gives plan participants the right to appeal for their benefits and to sue the plan for breach of fiduciary duty. The Consolidated Omnibus Budget Reconciliation Act, or COBRA, allows employees and their families to retain group health benefits after job loss due to certain life events, such as reduction in hours, transfer between jobs, divorce or death.