What is one advantage of group health insurance plans?

Group health insurance plans offer a significant advantage in that they typically result in lower premiums due to the concept of risk pooling and employer contributions. Risk pooling occurs when a diverse group of individuals, such as employees of a company, come together to share the risk of health-related costs. Because the risk is spread across a larger population, the cost per individual tends to decrease.

Employers often contribute to the premiums for group plans, further reducing the financial burden on employees. This contribution can make health insurance more affordable for those enrolled in the plan. Additionally, group plans leverage the collective bargaining power of the group, allowing for negotiations that can lead to more favorable premium rates and benefits compared to individual health insurance options, which may not have the same ability to negotiate.

In contrast, the other options illustrate disadvantages associated with group health insurance. Higher premium costs are generally not an advantage, as group plans are designed to provide lower rates. Limited coverage options and strict eligibility requirements are also factors more commonly associated with individual plans rather than the broader offerings that group plans can provide.