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Small Group vs Large Group Health Insurance: Key Differences

Team AckoSept 23, 2022

Group Health Insurance Plans can be a significant addition to your overall Employee Benefits package. But, does the number of employees in your organisation matter while choosing an insurance policy? If you are wondering about the difference between Small Group and Large Group Health Insurance, this article is for you.

Small Group Vs Large Group Health Insurance

What is Small Group Health Insurance?

Small Group Health Insurance is an insurance plan offered to a small group of employees working in an organisation. Usually, an organisation with 25 to 50 full-time employees buys this type of insurance plan.

What is Large Group Health Insurance?

Large Group Health Insurance is an insurance plan suited for a large group of employees. An organisation having more than 50 employees can go with this type of Group Health Insurance. 

Note:The distinction between Small Group Health Insurance and Large Group Health Insurance in this article is made to simplify the concept. Ultimately, the employer and the insurer can discuss and decide the number of employees to be covered, the extent of coverage offered, etc.

Key differences between Small Group and Large Group Health Insurance

Here are the key differences between Small Group vs Large Group Health Insurance.

Parameter Small Group Health Insurance Large Group Health Insurance
Eligibility Usually, a company with 25 to 50 full-time employees opts for Small Group Health Insurance. Usually, a company with more than 50 full-time employees opts for Large Group Health Insurance.
Premium amount Compared to a larger group, the average per-employee premium amount is usually higher for a small group of insured employees. Compared to a smaller group, the average per-employee premium amount is usually lower for a large group of insured employees.

What are the requirements for Large Group Health Insurance?

Here are the basic requirements for a Large Group Health Insurance Policy. Note that this is just an overview; specific requirements need to be discussed between the employer and the insurer. 

  • A company having over 50 salaried employees working for them full-time buys Large Group Health Insurance.

  • The insurance buyer must understand the terms and conditions of a policy and comply accordingly to make an insurance purchase.

What are the requirements for Small Group Health Insurance?

Here are the basic requirements for a Small Group Health Insurance Policy. Note that this is just an overview; specific requirements need to be discussed between the employer and the insurer.

  • Usually, a company with 25 to 50 full-time salaried employees chooses Small Group Health Insurance.

  • The organisation must also comply with the rules and conditions set forth by an insurance provider under their Small Group Health Insurance Plan. 

What is covered in Small and Large Group Health Insurance?

The coverage offered under Small or Large Group Health Insurance can differ from one insurer to another. Hence, it would be best to connect with the insurance company or read applicable policy documents to know the scope of coverage. 

Here’s a generic list of inclusions offered under such types of health insurance plans. 

  • Hospitalisation expenses

  • Ambulance service

  • Pre-hospitalisation expenses

  • Post-hospitalisation expenses

  • Lab tests

  • Prescribed medicines

  • Preventive care

Benefits of Small and Large Group Health Insurance

Here’s how both small and large organisations can benefit from Group Health Insurance Plans.

Saving tax

The money spent on health insurance for employees is considered a business expense. The employer can obtain tax deductions as per the Income Tax Act against the paid premium. 

Better employee productivity

The wellness benefits offered to employees in the form of health insurance can result in fewer health-related leaves. Moreover, employees get consistent support to be mentally and physically healthy. All of this can contribute to boosting individual and team productivity. 

Better hiring

The health benefits offered by a Group Health Insurance Policy add more value to the overall Employee Benefits package. It can make your company more desirable, resulting in better hiring. 

To know more benefits, check out our article titled Importance of Group Health Insurance for Employees and Employers.

How much does Group Health Insurance cost?

There are multiple factors that impact both Large and Small Group Health Insurance quotes. Here are the most important factors that decide the cost of a Group Health Insurance Policy. 

1. Company size

As already mentioned, the size of a company plays a big role in deciding the final cost of Group Health Plans. Large groups include more employees than smaller groups. This is why insurance premiums (on an average per employee) for a large group are lower than for smaller groups. 

2. Age group

The age of insured employees is also important when it comes to determining the cost of Group Health Insurance. A simple rule is that the higher the age of the insured members, the higher the premiums. This is because the chances of health problems and emergencies increase as people age. 

3. Occupation type

The premiums can also increase or decrease based on the type of occupation the to-be-covered employees are involved in. The injury rate and other risks are analysed with respect to the occupation while calculating employee policy premiums. For instance, insurance premiums for employees working at a construction site or factory would be higher than premiums for employees with desk jobs. 

4. Tenure of a policy

The tenure or duration of a policy also impacts the insurance premium. Comparatively, a longer policy tenure tends to reduce the premium in the long run, while policies with shorter tenure cost more.

Group Medical Cover (GMC) by ACKO

At ACKO, we understand the unique Group Health Insurance needs of small as well as large organisations. We can discuss your requirements and come up with a tailored insurance plan for your employees with regard to coverage, features, premium, etc., to suit your requirements. Schedule a Demo to get started! 

Frequently asked questions (FAQs)

Here are a few commonly asked questions and their answers about Group Health Insurance.

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How can I buy Group Health Insurance for employees working in my small business establishment?

You can buy a Small Group Health Insurance Policy by reaching out to a suitable insurer. For instance, you can approach us to enquire about Group Health Insurance for small businesses

Can I count my part-time employees in the group size for Group Health Insurance?

No, you usually can’t include part-time or contract-based employees as covered members in a Group Health Insurance Policy. Commonly, only full-time salaried employees can be a part of the group to be insured under the policy. Please discuss the details with your insurer.

How does the age of employees impact the Group Health Insurance Policy’s cost?

A Group Health Insurance Plan will cost you more if most of the people in the to-be-insured group belong to the higher age category (high age = high risks). Hence, an insurance company usually looks at the average age of a group as one of the criteria to decide the premium. 

Does Group Health Insurance cover doctor consultations?

Group Health Insurance offered by ACKO includes doctor consultations as per applicable terms and conditions.

Disclaimer: The plans, services, features, processes, and other details mentioned on this page are subject to availability and changes. Please check the applicable policy wordings before making any insurance-related decisions. Feel free to reach out to us at [email protected] for any queries.

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