Health insurance purchased by an employer to cover its employees, typically at lower per-employee cost than individual policies.
Group health insurance is employer-sponsored health coverage where the employer (or PEO) purchases a policy that covers a defined group of employees. The economics: insurers can price group coverage by averaging health risk across the whole group rather than individually underwriting each member, which typically results in lower per-employee premium than individual market policies.
For small employers (under 50 employees), the small-group market produces high-variance pricing that depends heavily on the employer's specific risk profile. PEO pool placement bypasses this — by pooling many small employers together, the PEO's master plan prices closer to large-group rates than any one small employer could achieve standalone.
The renewal trajectory matters as much as the initial price. A PEO that quotes a low first-year rate but renews 20%+ year 2 is a worse deal than one that quotes 10% higher initially but renews at single digits.
Health insurance purchased by an employer to cover its employees, typically at lower per-employee cost than individual policies.
Group health insurance is employer-sponsored health coverage where the employer (or PEO) purchases a policy that covers a defined group of employees.
Most PEO buying decisions touch several related concepts at once. Group health insurance typically comes up alongside the other terms in this category. Closely related terms include Open enrollment, Cafeteria plan (Section 125).
This is one entry from our PEO glossary covering payroll, benefits, workers comp, HR compliance, and PEO mechanics. Browse all terms.
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