Group Health Insurance
Many employers today continue to have questions about the Affordable Care Act and what it means for the group health benefits they offer employees. Phoenix Insurance Group has answer to those important questions – and many more.
We can clear up the details that may be vague or confusing so that your employees are getting the group health insurance benefits you want them to have and that will comply with new regulations.
What Qualifies as Group Coverage?
Group coverage refers to one single policy that is issued to a group. In the case of a small, or not-so-small, business, that’s generally the employees of the business, though other groups may get group coverage. This insurance plan covers not only the employees, but can also extend to their dependents.
It’s different than a single policy, which is issued to either one single person or a family.
Group coverage prices are set according to risk assessments based on the entire group using general information about the group such as the age or dominant gender of group members.
According to federal law, small businesses, those who have between two and 50 full-time employees, are guaranteed group coverage if they choose to purchase it for their employees (owners count as employee too, so if your business is a partnership or even a sole-proprietorship with a single full-time employee, you can offer group coverage).
Be aware, if you offer group health coverage to one full time employee, you must offer it to all full time employees. You may choose to or not to offer coverage to employees who work fewer than 30 hours per week on average. These are typically considered part-time employees. If you do offer one part-time employee group health benefits, then you must extend the offer to all part-time employees too.
What Kind of Group Health Insurance Coverage is Available?
Small businesses essentially have four different levels of coverage options available to them to offer their employees under the Affordable Care Act. The act offers benchmarks for coverage and small business employers can choose group health coverage from any one of the four tiers:
1. Platinum Plans, which may pay as much as 90 percent of medical expenses.
2. Gold Plans that cover up to 80 percent of medical expenses.
3. Silver Plans are supposed to cover 70 percent of medical expenses.
4. Bronze Plans which should pay 60 percent, roughly, of medical expenses.
Keep in mind that these are ballpark figures about the average coverage of medical expenses. The plans do not require an upfront copayment of 10, 20, 30, or 40 percent of estimated medical costs.
How are Rates for Group Health Insurance Determined?
Insurance rates for group health plans is based solely on the perceived risk by the insurance provider. All insurance is an assessment of risk vs. potential reward. For instance, if everyone on your staff is over the age of 70, or even the vast majority, your group insurance rates are going to be higher than it would for a business staffed by 30-something year old men.
The good news for employers, particularly small business owners, is that tax credits are now available to help cover some of the costs associated with offering group health benefits to employees.
Don’t make costly mistakes with your group benefits. Contact Phoenix Insurance Group today at: 908-879-6500 to get the answers to your group health questions, including learning about group health premium costs.