If you’re a small business owner and you’ve spent some time shopping for health insurance for your employees, you’ve likely encountered the terms “Group Health” and “Blanket Health.” Here’s an overview to help you understand how each type of coverage works and how they apply to your business.
What is a Group Health Insurance Policy?
A Group Health Insurance policy offers health benefits to your employees as well as spouses or other eligible dependents. It provides employees with medical benefits when they visit a health care provider like a doctor, urgent care facility, or hospital. A Group Health Insurance policy may also include coverage for prescription drugs and other health and wellness benefits – like discounts on Vision, Dental, or the option to purchase Life Insurance.
What is a Blanket Health Insurance Policy?
Despite its name, a Blanket Health insurance policy is less comprehensive than a Group Health policy. In fact, it is most often an accident-only policy issued to cover a group of individuals engaged in a specific activity. For example, school districts, colleges and universities, and sports teams can purchase Blanket Health coverage to provide health benefits to athletes and cheerleaders. These policies may also be issued to civic, non-profit, or religious organizations for participants in (or employees of) ongoing or one-time events or camps. Volunteer firefighters may be covered by a Blanket Health policy for medical treatment in connection with accidental injury related to their fire-fighting roles.
Most importantly, a Blanket Health insurance policy typically has limits on the types of covered tests, procedures, and services. There may also be a maximum covered benefit – ranging from $5,000 to $50,000 of eligible expenses – for treatment of individuals under this type of policy.
More on How the Policies Differ
In contrast to a Blanket Health insurance policy, a Group Health insurance policy – particularly one that includes the Essential Health Benefits (EHBs) mandated by the Affordable Care Act (ACA) – does not have a dollar limit on what it will pay for care received by you and your employees while you are insured. The ACA actually prohibits health insurers from limiting your annual or lifetime coverage expenses for EHBs under a Group Health plan.
In addition, a Group Health policy typically covers you for a full plan year (12 months). If you want coverage long-term, a Group Health policy may be a better choice for you, since a Blanket Health policy may have a limited term duration.
Summarizing the Key Differences Between Group Health Insurance and Blanket Health Policies
| Feature/Aspect | Group Health Insurance | Blanket Health Insurance |
|---|---|---|
| Coverage | Comprehensive benefits including medical care, prescription drugs, and sometimes vision, dental, and life insurance. | Limited scope, often accident-only coverage for specific activities or groups. |
| Eligibility | Covers employees, their spouses, and eligible dependents. | Covers groups of individuals participating in a defined activity (e.g., sports teams, event participants, or volunteers). |
| Scope of Benefits | Includes tests, procedures, and services as part of Essential Health Benefits (EHBs) mandated by the ACA. | May have restrictions on covered services, tests, and treatments, with limits on total eligible expenses (e.g., $5,000 to $50,000). |
| Policy Limits | No dollar limit on annual or lifetime benefits for covered Essential Health Benefits (per ACA rules). | Features capped maximum benefits, usually ranging between $5,000 and $50,000 per individual. |
| Typical Use Cases | Ideal for businesses seeking to provide comprehensive health and wellness benefits to employees and their families. | Suitable for organizations covering individuals during specific activities or events, such as schools, sports teams, or volunteer groups. |
| Best For | Small or large businesses aiming to attract and retain employees with robust health benefits. | Schools, athletic organizations, non-profits, or event organizers needing temporary, activity-specific coverage for participants or workers. |
| Why Consider It? | Offers broad and ongoing coverage, ensuring employees have access to wide-ranging medical care and protections against high medical costs. | Provides targeted coverage for accidental injuries tied to an event or activity, offering cost-effective protection for specific situatio |
Choosing What’s Right for Your Business
Taking the time to educate yourself on the differences between Group Health insurance and Blanket Health insurance policies is an important step in choosing coverage that’s right for you. To find out if your business qualifies for Group Health insurance, click here or talk with your employee benefits agent. To explore this subject further, consider reading 7 Things to Know About Offering Group Health Insurance.
Your employee benefits agent can also provide you with a quote for health insurance for your employees. If you’re not currently working with an agent, go here to find a licensed expert in your area.
