A group health plan is defined an employee welfare benefit plan established or maintained by an employer or by an employee organization (such as a union), or both, that provides medical care for participants or their dependents directly or through insurance, reimbursement, or otherwise.
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Most private sector group health plans are covered by the Employee Retirement Income Security Act (ERISA). Among other things, ERISA provides protections for participants and beneficiaries in employee benefit plans (participant rights), including providing access to plan information. Also, those individuals who manage plans (and other fiduciaries) must meet certain standards of conduct under the fiduciary responsibilities specified in the law.
As such, many refer to these type of plans as ERISA group health plans.
Here are a few examples of group health plans:
- A group health insurance plan (defined below)
- A self-insured health plan
- A self-insured medical reimbursement plan (ex: Healthcare Reimbursement Plan or Section 105 Medical Reimbursement Plan)
Group Health Insurance Plan Definition
A group health insurance plan is a type of group health plan that provides actual health insurance coverage.
A group health insurance policy is purchased by an employer (or employee organization) and is offered to eligible participants, and to eligible dependents of participants. With group health insurance, the risk is spread over the company — the number of participants covered. There are several types of group health insurance plans including HMO, PPO, etc.
Group health insurance is also known as employer-sponsored health insurance or job-based health insurance.
In other words, a group health insurance plan is a group health plan, but a group health plan is not always a group health insurance plan.
NOTICE: Federal government repeals small group expansion
On October 8, 2015, the federal government repealed the decision to redefine customers with 51 to 100 employees as small groups. That means these customers will continue to be defined as large groups and must purchase health coverage in the large group market.
The federal legislation still allows individual states the option to expand the definition of small group from 1 to 100 employees in 2016, which is the definition currently set by the California legislature.