What is a master health plan?

A master health plan is one group health insurance policy. An insurer issues it to one policyholder, such as an employer or a professional employer organization (PEO). The policy covers many workers under one contract. Each worker gets a certificate of coverage, not a separate policy.

The policyholder holds the master contract. The workers hold the right to coverage under it.

How does a master health plan work?

A master health plan follows six steps, from contract to renewal.

1. The policyholder signs the contract. The insurer and the policyholder agree on plan designs, prices, and rules.

2. The policyholder sets the rules for who can join. Most plans have a waiting period and a minimum work-hours rule.

3. Workers enroll. Each worker picks from the plan options the policyholder offers.

4. Workers get proof of coverage. The insurer or policyholder gives each worker a certificate of coverage.

5. The insurer pays claims. The insurer pays approved claims under the master contract.

6. The policyholder renews the plan each year. The insurer sets new prices at renewal.

Who uses a master health plan?

Four groups use a master plan:

• Employers that offer one group plan to their staff

• PEOs that share employer duties with client companies through co-employment

• Associations that offer coverage to their members

• Unions and other member groups

Master health plan and PEO

A PEO often holds the master health plan. Many client companies then join the same plan. This gives small and mid-size teams access to large-group plan options and pricing. Read our guide to choosing a PEO for health insurance to learn more.

A PEO is a US co-employment model and needs a US entity. An employer of record (EOR) is a different model. Do not use the two terms interchangeably. See our PEO vs. EOR comparison for the details.

Deel's PEO helps US teams manage payroll, tax, HR administration, and benefits. Teams can use Deel's PEO health plans from leading carriers. They can also keep their current broker and plans. Deel's PEO also gives access to an Aetna International master plan for globally mobile employees.

Master health plan vs. individual health plan

A master plan covers a group under one contract. An individual plan covers one person and their family.

What are the benefits and limits?

A master health plan gives teams three clear benefits:

• One contract replaces many separate policies.

• Small teams can access large-group options.

• The policyholder handles enrollment and renewals in one place.

It also has three limits:

• A client company has less control over plan design when it joins a shared plan.

• Group renewals can change prices for every member.

• A worker may lose coverage when they leave the group. Rules vary by state and by insurer.

What is the difference between a master health plan and a group health plan?

A master health plan is a type of group health plan. "Group health plan" names any coverage that a group shares. "Master health plan" names the single contract behind that coverage. The US government defines a group health plan as coverage that an employer or employee organization offers.

Does a worker get a copy of the master health plan?

No. The policyholder keeps the master contract. Each worker gets a certificate of coverage or a plan summary. These documents list benefits, costs, and rules.

Is a master health plan the same as a PEO health plan?

Not always. A PEO often holds a master plan for its client companies. A master plan can also belong to a single employer or an association.

Can a small business use a master health plan?

Yes. A small business can join one through a PEO or an association. A PEO needs a US entity and state registration. Rules vary by state. Read how a PEO supports US expansion for the requirements.

Does Deel offer a master health plan?

Yes, in one form. Deel's PEO offers health plans from leading carriers. It also offers access to an Aetna International master plan for globally mobile employees.