What is group health insurance? You might think that a group health insurance plan and an individual health insurance plan are the same thing. They are not. Sadly, the two types of insurance are easily confused. So to help sort out the differences, we begin by asking a few questions.
A group health insurance plan for small businesses is a health insurance policy that small businesses can offer to their employees. (A small business is defined as those businesses with less than 50 full-time or full-time equivalent employees.) This is different from individual health insurance that an individual may purchase as an individual or a family. Group health insurance plans may offer added benefits that are not available in individual plans.
One difference is that group health insurance can often cost less than individual health insurance because the risks are spread over the entire group of employees.
So group health insurance for small businesses is usually a single policy that covers the entire group of employees, and potentially their dependents. It may be less expensive than individual health insurance.
Yes. Typically, like individual and family health insurance plans, group health insurance plans may be broken down by plan type or by metal level.
While the laws are always changing, small businesses below 50 full-time equivalent employees generally are not required to offer group health insurance, so many do not. However, if you offer one full-time employee health insurance you will often need to offer health coverage to all of your full-time employees.
When health insurance is offered it often includes the employee’s dependents — spouse, children, etc. Eligible children may be covered to age 26.
Yes. The employer can decide how much the employee’s share of health insurance coverage is, though the employer is generally required to pay at least 50% of an employee’s monthly premium. The breakdown must generally be standardized and not personal. For example, usually all middle managers should pay the same amount, and all entry level employees should pay the same. The cost should not target individuals or groups of people.
Because the laws in this area are always changing, it is important to ask questions. That is why a good broker is beneficial to your business and your employees. Instead of fussing over group health insurance by yourself, talk with a broker about your unique situation. Remember, this article is only for general information and not intended to provide specific advice for your particular situation. You should always consult with a broker or other advisor that knows about your particular situation when making important decisions related to group health insurance.
Think about what kind of group health insurance you need:
A quality and qualified broker can help you sort out all of this by offering you group health insurance that works with your company structure.
Here are some key terms associated with health insurance costs and coverage. Understanding what each term means might help you make the right choices in regards to your health insurance coverage.
Premiums — Premiums are the monthly costs associated with purchasing and maintaining coverage under a health insurance policy. Monthly premiums are typically split between the employer and employees.
Deductibles — An annual deductible is a set dollar figure that you are generally required to pay out of your own pocket before the insurance company begins to pay for covered medical services, such as doctor’s visits, lab work, or prescription drugs. Some plans have separate medical and prescription drug deductibles. It’s important to note that some preventive medical services may be free of charge to you, while others may apply toward your deductible or require copayments.
Effective date — In general, the effective date is the date on which coverage begins under a new health insurance plan. This may be the date on which your new group health insurance plan comes into effect, or it may refer to the date on which a new employee or dependent becomes covered under your existing plan.
Choosing the best group health insurance for your small business is no easy task. It is beneficial to sit down with a broker and go over the need of your company. This review should include a discussion of company costs, plan options, employee needs, different tiers of coverage, and the cost to employees. One thing is certain, the language used in health insurance is tricky. A broker can help you see clearly and to also discover the best options.
This article is for general information only, so do not use it as a substitute for advice from a qualified professional who understands your specific situation.