Group health insurance plans can be a great way to purchase health insurance and share the risk among a larger group of people, which can lower health insurance premiums. But there are other factors that can affect the cost of group health insurance, as well.

Age 

Age is perhaps the biggest factor when it comes to health insurance plans and group health insurance is no exception. Premiums can be calculated based on the ages of the employees, their spouses and their dependents. The base rate for group health insurance is generally defaulted for 21 years of age. Rates typically increase per year as the insured and their dependents age. Insurance for families is expectedly more expensive than health insurance for individuals, as you must add the age risks of each family member insured in order to calculate premiums.

Tobacco 

Just like with individual health insurance, group health insurance considers the use of tobacco as a high-risk activity that raises your insurance rates. This is because smoking tobacco can have detrimental affects on your health and even shorten your lifespan. If anyone on the policy smokes, your family’s group health insurance policy’s premiums may rise. Individuals failing to identify as tobacco users can lead to being dropped from a health care plan.

Location 

Group health insurance is calculated in part by the location of the business. This premium difference is based off of the price of health care in the area. Some cities have more expensive health care than others, meaning premiums may be higher in order to cover the extra cost. These premiums cannot be affected by the general or overall health of people in the area. 

How Much is Group Health Insurance? 

The average cost of group health insurance for an individual employee is about $1,186 a year (approximately $98.83 a month.) The employer covers roughly 82% of the total remaining cost, which in this case is $5,711 a year. The average cost of group health insurance for a family is about $5,547 a year (around $462.25 a month) while the employer covers around $14,069 of the total cost.

Before signing up for an employer’s group health insurance, make sure to check the coverage available and compare the price to an individual policy. Group health insurance can save you money, but it isn’t always the best option for everyone. Get health insurance quotes today.