Group Health Insurance: Frequently Asked Questions

Group Health Insurance Plans: Frequently Asked Questions, Answered 

As a business owner, you want to do right by not only your audiences and clients, but your employees as well. Often, they’re the lifeblood of your operation and your business wouldn’t be where it is today without your skilled team. Group health insurance plans are beneficial because they can spread risk across several insured individuals. Premiums are generally inexpensive and insurance providers may have a more defined idea of who is being covered under the plan.   

It is an attractive benefit for a business to offer group health insurance, especially as it is less expensive when purchased for a group. There is less risk being assumed as more people are being insured under the plan. However, not everyone fully understands what it includes, its benefits, and more. Here are some answers to frequently asked questions:  

What is group health insurance? 

A group health insurance plan offers medical coverage to the members of a business or organization as employees. They may provide additional coverages, including vision and dental, either separately or as a part of a larger package. Since the risk is being spread throughout an insured group, the insurer can charge much lower premiums than if each person were to be insured by an individual policy.  

These plans can be extended to cover the family members of your employees as well. Typically, only full-time employees may qualify for this coverage. 

How much does group health insurance cost? 

It depends on your business, employees, how many people are insured under your plan, among other things. For the individual, it may cost less than $10,000/year, with employers covering more than 50-80% of that overall cost. Employees may only be responsible for the difference. 

What is employee benefits liability coverage, and do I need it?  

Employee benefits liability coverage, or EBL, offers your company liability protection for any errors, omissions, or negligence when administering employee benefits programs. This insurance policy may include coverage if your HR or plan administrator fails to properly maintain an employee’s records that are relevant to their benefits program, fails to enroll or terminate a benefits program, and there are others. If you offer any sort of employee benefits or program, including group health insurance, you should consider this vital coverage. 

What are employee participation benefits? 

Employee participation benefits are incentives that encourage employees to take initiative and actively involve themselves in the company’s decision-making process. Employee participation benefits may include rewards like flexible working hours and work-from-home options.  

What does a business need to do to qualify for group health insurance?  

To qualify for group health coverage, companies may be required to fulfill several requirements. They must have at least one full-time employee (or full-time equivalent) that is not the business owner or their spouse. The business must also be a legal entity in accordance with its state’s regulations. Note that the definition of an employee and the definition of a legal entity will vary by state, so you may need to familiarize yourself with your state’s requirements. 

Employees may only qualify for group health coverage if they work for you at least 30 hours/week. Once you are sure that you can qualify for group health insurance, contact an agent – like the ones here at Hitchings – and discuss your business’s needs.  

Is group health insurance more expensive than individual plans?  

It depends on the organization being insured, but typically small businesses may find that plans are the most cost-effective approach for their budgets. Group health insurance plans for small businesses tend to have a lower per-person price than purchasing individuals plans. This is due to the tax benefits for employees and employers, risk pool advantages, and employer contributions. Plans also tend to be more stable than individual plans.  

Are there different types of group health insurance plans? 

Note that there are two main different types of group health insurance plans. Those are PPO and HMO. PPO, a preferred provider organization, allows employees to select from a list of providers in their area. There is still coverage if a provider is not preferred. HMO, on the other hand, is a health maintenance organization, which requires your employees to only use the providers in their network. If an out-of-network provider is used, there is no coverage!

Does group health insurance always include vision and dental coverage? 

Not always. It depends on the exact plan, as each specific group health insurance plan may offer different benefits. Some companies may include these additional types of health insurance as employee benefits. Otherwise, you can receive vision and dental insurance through different means. Dental and vision insurance can be purchased as separate stand-alone policies, or your employer may have purchased a health insurance package that includes these benefits.  

Why purchase group health over individual coverage? 

Employees can choose to purchase individual plans as an alternative to group plans. However, there are numerous benefits to employer-sponsored health insurance coverage. They may have a variety of options when it comes to health insurance plans, their premiums can be deducted from their paycheck pre-tax, and the employer will generally pay for over half of their monthly premium. 

Self-employed individuals or those whose work does not offer group health insurance plans may acquire individual coverage. This means they will need to manage all their health insurance coverage, choose a plan, and contribute 100% of their monthly premiums. 

Note that these plans may vary in their benefits, depending on the business and the plan that is purchased. Selecting group benefits that fit the needs of your business is one of our specialties and we will walk you through each step. It just starts with requesting a quote!

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