Which statement accurately describes group health insurance?

Group health insurance is characterized by the arrangement where the insurer's contract is made with the organization sponsoring the group plan. This means that the health insurance coverage is typically provided to a collective group, such as employees of a company or members of an association, rather than individual contracts for each member. The sponsoring organization handles enrollment and premium payments, centralizing the administration of the health plan.

This structure allows for cost efficiencies and simplified management for both the insurer and the insured. Group plans can offer benefits to members without needing individual underwriting processes for each person, which differs from individual health insurance where each policy is a separate contract. Thus, the correct understanding of group health insurance is rooted in the collective arrangement between the insurer and the organization, making this answer accurate.

The other statements involve inaccuracies around the nature of group insurance. Issuing a policy to each member would imply individual contracts rather than a singular collective policy. Requiring a medical questionnaire for each individual contradicts the typically streamlined process of group insurance, where medical underwriting is often not necessary. Finally, while group policies may provide broader options, they are usually more cost-effective than individual policies due to economies of scale, rather than being inherently more expensive.