Small Group Health Insurance

Whether you are a start-up or an established family business, we can offer a long-term strategy to help contain costs without reducing available benefits, be on-hand to help you with the day-to-day problems, and offer you services to aid staff productivity and retention. Benefit Advisors offers a variety of small group benefit plans such as:

  • Medical
  • Prescription Drug Benefits
  • Dental
  • Vision
  • Life
  • Disability
  • Voluntary Benefits
  • Employee Assistance Programs
  • Wellness Programs

 We also offer an array of value-added services normally only available to larger companies.

What is employer sponsored group health insurance?

Group health insurance coverage is an insurance policy that is purchased by an employer and is offered to eligible employees of the company (and often to the employees' family members) as a benefit of working for that company.

Advantages for Employees:

  • Employers pay a portion of the premium for the employee (and sometimes for the employee’s family members).
  • Typically, employers pay 1/2 or more of the monthly premium for an employee.
  • Most employers have established Premium Only Plans (often called POP plans) that allow employees to pay any employee-required contributions to premiums on a pre-tax basis.

 Advantages for Employer:

  • Employers attract and retain significantly superior employees
  • Typically, Employer paid premiums are tax-deductible as a business expense.
  • Employer’s payroll taxes are reduced by employee premiums paid through the section 125 (POP plan).
  •  Employers reduce turn-over of employee talent
    • Hiring expenses
    • Training expenses

Are all employer group health insurance policies the same?

The implementation of the Affordable Care Act (ACA) has allowed the federal government to regulate health insurance and created some basic requirements in all health insurance policies. This is particularly true for individuals purchasing coverage on their own as well as for smaller employers with 50 or fewer employees.

The laws about how coverage can be issued to large groups are different than those for small groups, and the way that premium rates are determined is also different.

On January 1st 2016 the laws will change from fewer than 50 to fewer than 100 employees.

What are the coverage requirements for small employer plans?

At this time, small employers are not required to offer health insurance to employees. Many do so because they believe that health insurance coverage is a valued employee benefit that helps employers attract top employees and retain them. State and federal laws apply to varying degrees – again based on factors including the number of employees, the type of business and whether an insurance company is providing the coverage.

The Affordable Care Act requires that insured small group plans offer health plans that meet certain benchmarks. The benchmarks are represented by the metal levels of platinum, gold, silver and bronze. Each metal level tier plan is designed to provide the same average level of benefit to an enrollee.

The tiers are based on the percentage the plan pays of the average overall cost of providing essential health benefits to members:

  • Platinum plans are the most generous and more expensive. These are designed to pay as much as 90% of medical expenses
  • Gold plans are designed to pay 80% of medical expenses
  • Silver plans are expected to pay 70% of medical expenses
  • Bronze plans are expected to pay 60% of medical expenses.

It’s important to note that the metal tiers reflect what the plans will pay on average. These percentages are not the same as coinsurance, which calls for an individual to pay a specific percentage of the cost of a specific service.

There are other myriad requirements that apply to group health in addition to those required by the ACA. There are laws that address benefit communications (ERISA), claims appeals (ERISA) and portability of coverage (HIPAA) among others.

Both the ACA and the federal HIPAA law mandate that no matter what pre-existing health conditions small employer group members may have, no small employer or an individual employee can be turned down by an insurance company for group coverage. This requirement is known in the insurance industry as “guaranteed issue.” In addition, each insurance company must renew its small employer health plan contracts every year, at the employer's discretion, unless there is non-payment of premium, the employer has committed fraud or intentional misrepresentation, or the employer has not complied with the terms of the health insurance contract.

Small employers may purchase insurance plans that are provided through the new SHOP markets operating in each state or in the market outside the SHOP. Health insurance plans that are offered in the SHOP exchange are generally also available in the market outside of the SHOP. It’s important to note that an employer that wishes to claim the Small Business Health Insurance Tax Credit must purchase a SHOP-based plan.

Your state’s Department of Insurance or other state agency that regulates insurance in addition to a professional insurance broker licensed to sell and service insurance in your state is also a good resource for information.

How are premium rates determined for small group employers?

Premium rate determination with the advent of the ACA is significantly different than has been the norm in many states prior to the ACA law. Small group insurance plans are now rated as modified community rating.

With modified community rating, health plans may vary the community rate based on limited factors such as age, geography or smoker status.

Example: With modified community rating with a variation for age, the rate is higher to insure the 55-year-old male smoker with cancer and a heart condition. However, the insurer would have to use the same rate when calculating premiums for the healthy 27-year-old male as it would for a male employee who is the same age but suffers from juvenile diabetes.

Depending on the rules applicable in a state, employers may be able to provide their employees with choices of different insurance companies; different plans within a metal

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