Health insurance is one of those things that no one wants to talk about, because that implies either a) shelling out money for it, which means less money in your pocket, or b) you need to use it, because something is wrong with you or a member of your family.
But like it or not, health plans are something that must be taken into consideration in today’s workplace, and with all of the recent attention that health care has been attracting the past few years, it’s a high-profile perk in the benefits packages offered to prospective employees. After all, once you get salary out of the way, it comes down to what extras a business offers as inducements. It’s expensive to be sick, so health plans become a major draw.
So here are some frequently asked questions about group health plans and in some cases how they relate to small businesses. For more information, check out this group health insurance FAQ, which covers questions not only for employers, but also employees.
What is considered Small Business Health Insurance?
Most states consider a small business to be between two and 50 employees. Mid-sized businesses are usually considered to be between 50 and 99 employees, and large-sized is over 100 employees. Although the actual parameters vary slightly from state to state, the last word on which category your business falls under belongs to the insurance company.
How many Employees need to Participate before Coverage can take Effect? Is there a Tipping Point?
Yes, as a rule, insurance carriers expect that at least 60 percent of a company’s eligible workforce participate in the plan.
How does a Business get started in getting a Health Plan in Place?
You can contact either a health insurance broker or an agent. A broker is a professional whose job it is to direct companies to the right insurance company for their needs. An agent is a representative of one insurance company. If you don’t end up using a broker, you’ll probably have to deal with as many agents as insurance companies that you’re shopping at.
Which of My Employees is Supposed to Handle all of this? Is it Me?
That really depends on the size of your company. If you have someone who handles employee benefits, the task may fall to them. Your Human Resources people, if you have any, are ideal for the task. Of course, if you’re a really small company and you have strict control over expenditures and such, then congratulations, you’re elected!
How much do Employers Contribute to Health Insurance as a Rule?
Employers usually pay between 25 to 50 percent of an employee’s monthly premium for a qualifying group health insurance plan. The precise amount varies depending on the insurance company, the policies offered, and what state the business is located in.
Can an Employer change Insurance Companies and benefits at will?
Yes, a business can change health plans at any time. As a rule, companies notify their employees about upcoming changes during the open enrollment period.
Speaking of which, what’s Open Enrollment?
Open enrollment is a block of time, usually between 30 to 60 days before effective date of health insurance coverage or the renewal date, put aside so that employees can be informed about what sort of benefits are being provided, and what changes, if any, are in the works. This period is when employees can either change existing coverage or initially sign up for a plan.
What happens to Group Health Insurance if an Employee Leaves the Company?
The employee could be eligible for continued insurance protection under the Consolidated Omnibus Budget Reconciliation Act (COBRA) law. By means of COBRA, such an employee could receive a minimum of 18 months of continued coverage.
How do HMOs Fit in the Picture?
A Health Maintenance Organization plan is a group plan that provides a variety of medical care to its members. The insured are either assigned a doctor or they can choose one from a group of eligible general practitioners. When a patient visits the doctor, the latter will refer the patient to specialists if the need arises. So for instance, a patient may visit his regular doctor (via the HMO) because of a running-related injury, and the doctor may then send the patient to a specialist who covers sports medicine, again a doctor that’s part of the HMO network. HMOs limits your choices of doctor, something which many people aren’t comfortable with.
What about Pre-existing Conditions?
Because of changes brought about through the Affordable Care Act, as of January 1, 2014, most individual and group health plans must provide coverage to all applicants regardless of preexisting conditions. In addition, companies are not allowed to charge women higher premiums than men.
This covers some of the basics of group health insurance as it pertains to small businesses. There are a lot of choices out there when it comes to insurance, and it may take some time and effort to wade through them all. For instance, there’s catastrophic health plans available for those who are in general good health but want the peace of mind of that added coverage.