Where group health insurance falls short
None of these is a reason to walk away on its own, but each is a reason to manage the plan actively: one plan for everyone, renewals that move, rising deductibles, narrow networks, and coverage that ends with the job.
Four weak spots, and what to do about each.
Each limit is real. Each is also something an employer can work on.
One Plan for Everyone
Employees get the plan the employer chose, with little room to tailor it. Some employers look at an allowance model when one plan cannot fit a varied workforce.
Renewals Can Jump
A renewal reflects the group’s own claims and the market, and it can move sharply. Reading the trend against the group’s experience shows how much is the market and how much is the group.
Deductibles and Narrow Networks
Deductibles have climbed and some networks are tight. Employees feel both at the pharmacy counter and at the front desk, and often only after enrolling.
Coverage Ends With the Job
When employment ends, so does the employer’s plan. COBRA continuation is available in many cases, at a price the former employee pays.
What the rules say.
The “ends with the job” limit has a federal answer in COBRA. Here is what it says.
COBRA Applies at 20 or More Employees
Group health plans of employers that normally employed fewer than 20 employees on a typical business day in the prior year are excluded. See 29 U.S.C. 1161.
Continuation Often Runs 18 Months
For a termination of employment or a reduction in hours, the maximum coverage period is generally 18 months. Other events can extend it. See 29 U.S.C. 1162.
The Former Employee Pays
The plan may require payment of up to 102 percent of the cost of coverage. See 29 U.S.C. 1162(3).
Sources: 29 U.S.C. 1161 · 29 U.S.C. 1162
We help you find the weak spot before the renewal does.
We read your plan against your workforce and your claims, and tell you which of these limits is costing you the most.
Related pages.
What Group Coverage Does Well
The strengths that make group coverage worth keeping despite these limits.
Reading a Benefits Renewal
How to tell market trend from group experience in the number you were given.
Why Group Health Insurance Feels Broken
The full guide, from complaints to fixes.
Questions that come up.
Short answers to the questions we hear most. Each links to the full page.
What is the major disadvantage of group health insurance?
The main one is that the plan is chosen by the employer, not the employee, and its cost can move sharply at renewal. Rising deductibles, narrow networks, and coverage that ends with the job add to it.
Do employees lose coverage when they leave?
Employer coverage generally ends with employment. Many employers must offer COBRA continuation, which usually lasts up to 18 months for a job loss, at a cost the former employee pays.
Can a renewal be challenged?
A renewal can be marketed to other carriers and tested against the group’s own experience. Reading the trend first shows how much of the increase is market and how much is the group.
Ready? Send us your renewal, or talk it through with someone first. No cost, no obligation.
General information, not legal or tax advice. Plan-specific questions belong with the plan documents, the carrier and counsel.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents, two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
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