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Frequently Asked Questions
Group Benefits

 

How many participants are required to have group health insurance?

For most states and insurance companies the number enrolled must be two. Some do allow a husband and wife both working for the same company to each enroll and thus qualify as two participants.
 

What information do I need to collect so I may get a quote?

Insurance companies will need a basic census of your employees:
a list of your employees and their data such as: 

  • date of birth of any covered person
  • gender of any covered person
  •  type of coverage desired by each employee (spouse or significant other, child/children, or full family)
  • home zip-code of any covered person (not all insurance companies require this)
  • birth-dates of dependents to be covered
  • the number of children included in coverage 

In addition, they will need additional fundamental information about your company:

  • name of business 
  • business' address
  • type of business (industry)
  • business' inception date
  • name and contact information (phone and e-mail) of the person in charge of co-ordinating the company's benefits
  • the name of current insurance company, plan benefits and current premiums - if applicable claims loss ratio if your group is over 100 employees/members

 

We have a helpful worksheet that walks you through the necessary information. Simply contact us and we will email it to you right away. 

 

What are the requirements to have a group plan other than the number of persons seeking coverage?

There usually must be a common sponsor and premium collector with common participants, such as an employer and employees or association and its members. All participants are covered under, or have an option to choose, the same benefits plan or plans. Covered benefits within the plan are the same for all enrolled and usually cannot be elected or deleted individually. (Example, maternity might be on the plan and you could not elect to remove it in order to lower your premium.) Most group plans require at least 2 eligible, enrolling persons.

 

Several of my employees are insured elsewhere. What should I do?

This is a challenge for small business owners. Typically, employees covered by a plan through the employer of their spouse may "waive" coverage under your plan and your carrier will accept the remaining group. Some carriers do require they have 50% of your employees enroll, but others simply require those waiving to provide documentation of their other coverage. Contact us to discuss your particular situation and options available.


Can I offer individual plans to my employees?

Many insurance companies interpret the current laws as disallowing the employer to pay for individual medical plans when a true group exists - that is to say if more than one person is eligible for the plan.  Individual plans do not offer the same level of benefits and advantages as group plans. Generally, individual plans subject individuals to underwriting and exclude existing conditions if the insured as been some length of time without insurance. Legitimate groups, meeting the guidelines of the carrier, however, cannot be denied coverage.

Another thing to note is that the contributions you make towards the cost of individual policies may be taxable as compensation to the employee. Check with your accountant for details.


Do I need both Group Health insurance and Workers' Compensation insurance?

Group Health insurance is currently optional coverage; workers' compensation is most likely not optional.  It depends on your state's laws. Most states and the District of Columbia require employers to provide workers' compensation insurance, which generally pays for medical expenses and loss of income due only to a work related injury or illness. 

If you are a sole proprietor, partner, or officer of a small corporation, you may not be covered automatically by your workers' compensation policy. If this is the case, you must determine whether your own health insurance has exclusion for work-related injuries; you could have a gap in your own coverage.

Some states allow for owners and officers to waive out of workers' compensation coverage but most owners should consider electing the coverage if that option is available in their state. Contact us for more information.
 

 


Insurance terminology is confusing. Can you define some key terms for me?

        Co-insurance - This is a provision in which the insurer and the employee share in a specified ratio in a claim. For example, with 80% co-insurance the insurer would pay 80% of the total claim and the employee would pay 20%. 

        Co-payment - This is similar to co-insurance, but usually refers to a flat dollar amount and is usually the portion paid by the insured person. For example, a plan with a $15 co-pay for office visits requires the employee to pay the first $15 of any office visit, after which the insurer pays their stated amount. Different co-pay amounts may apply to emergency room treatment, prescription drugs, etc. 

        Deductible - This is usually a flat dollar amount that each insured person or family must pay toward their medical expenses, per calendar year or plan year, prior to receiving benefits paid by the insurer. There may also be a flat dollar amount to be paid by the insured on a per-visit or per-procedure basis, referred to as a co-pay.

        Maximum out-of-pocket - This is the maximum amount of medical expenses that an individual or a family pays (sometimes including deductible and co-payments) for all covered health care expenses in a calendar year or plan year. It is a maximum amount or cap on the medical expenses incurred by the insured. 

        Pre-existing condition - Any health condition of a person to be insured that existed prior to the effective date of a new plan is considered a pre-existing condition. That is to say, it is something for which the person saw a medical provider, for which they received treatment or took medication.   Pre-existing conditions may still be covered on a new plan, provided the person has had continuous insurance coverage. It is prudent to ask how pre-existing conditions are handled when changing plans.


I'm just starting out and have only a few employees. What type of group health insurance plan would be best for me to implement?

It depends on your goals.  If trying to attract top talent, you will need to offer good benefits. Otherwise, it might be advisable to offer a fairly basic, low-cost plan and a Flexible Spending Arrangement (FSA) where the employer is required to pay a portion of the premiums for the employees. Or perhaps a High Deductible Health Care (HDHC) plan with a HSA.  Then once your business has expanded you can then offer greater benefits. 


What kinds of tax breaks are available when I provide group health insurance for my employees?

You may be able to fully deduct the premiums paid on your group health insurance plan. You may also reduce your payroll tax by offering a Flexible Spending Account (FSA) as part of a total compensation package. Health Savings Accounts (HSAs) offer another significant tax break for you and your employees. Take the first step to choosing the right health insurance company - contact us for your free group health insurance quotes.
 

Why do my health insurance premiums go up even though I have had few claims?

You could think of it as the 'other side of the same coin' with respect to new medical discoveries, treatments, and cures in a growing population which live longer.  These advances come with an increasingly higher collective price-tag.  This is what is referred to as 'medical inflation' (cost of medical products and services) which has continued at a much higher, often double digit, rate over the last several years.  World class medical equipment, facilities and treatments provide Americans with world class medicine but it is expensive and though measures are being sought to contain cost, it has continued to rise.

Unhealthy life styles and eating habits do not help - nor do the insurance company's overhead and administrative costs plus lower profits from insurance company investments used to hedge against loss or insolvency.

While you might be fortunate and have no claims, others have experienced physical and mental traumas and thus made medical claims against the collective whole of the contributing population - which is the economics insurance is fundamentally based on.

 

 


Frequently Asked Questions :: Glossary of Common Terms

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