As your business grows not only will the number of your employees increase but so will their demands and needs. This means if you plan on scaling your operations, having a competitive benefits package is going to be an important factor in attracting and retaining top talent. And while providing benefits such as health insurance may only be a small piece of the puzzle, ensuring your employees are taken care of plays an extremely important role in creating a company where current and future employees want to work.
By providing group health insurance, businesses are able to let employees know they are looking out for their best interests, which will ultimately boost morale, build loyalty, and help grow and maintain a talented workforce.
So how do you go about finding the best type of health insurance for your business? Below, we break down the basics of group health coverage so you can figure out if it’s right for you.
What Is Group Health Insurance?
Unlike individual health insurance, which covers an individual or their family, group health insurance is a single policy issued to a business that covers all eligible employees and often times their dependents.
With group health insurance policies, insurers determine a premium price based on risk factors taken from the entire group, taking factors such as age and gender into consideration. By spreading the insurer’s risk across a number of people, members under the policy are usually able to receive insurance rates at a reduced cost.
Is Group Health Insurance Required?
To put it simply, it depends on the number of your staff that are considered full-time equivalent (FTE) employees. FTEs are defined as employees working an average of 30 hours per week in a given month.
If you are a business with less than 50 FTE employees, then you are not legally required to offer a health plan. However, under the Employer Mandate, the Affordable Care Act requires all employers with more than 50 FTE employees to offer affordable health insurance.
To figure out how many FTE employees you have on your team you can use this calculator or the following formula: (Total hours worked by part-time employees each week / 30) + # of full-time employees = Your FTE number.
Again, if you have 49 FTEs you aren’t legally required to offer health insurance. However, if you have 50 or more FTEs, at least 95% of your full-time workforce must be offered affordable health coverage that provides minimum essential coverage.
Is Your Business Eligible for Group Coverage?
Most likely. Under federal law, a business with 2 to 50 full-time employees is guaranteed group coverage if they wish to purchase it, regardless of employees’ health status. It’s also important to note that owners are generally counted as employees so sole proprietorships with one employee will fall into this category as well.
What Employees Are Eligible for Coverage?
If you decide to offer group health coverage to any full-time employee, then you must offer it to all your full-time employees.
This rule applies to employees regardless of any medical conditions they may have. This means anyone who is eligible cannot be denied coverage based on any preexisting conditions.
In addition, group health plans generally cover the dependents of eligible employees including spouses, children, and in some cases, unmarried domestic partners. You can find out more about employee eligibility and dependent coverage here.
What Do You Have to Pay?
As an employer, you have a couple of options when it comes to paying for coverage. You can either choose to pay the full premium, providing full coverage for employees, or partial coverage, where employees pay a portion of the cost. You can find more about the average cost of group health insurance for small businesses here.
How Do I Select the Right Group Plan?
If you are considering purchasing a group health plan, working with a local health insurance broker can help you find the best options for your business and guide you toward making the right decision for you and your employees. Health insurance brokers are licensed experts who:
- Know the market: they can discern the best plans from the mediocre. A health insurance broker will help you shop for the right group plan, provide you with one or more premium quotes, and discuss alternative options with you so that you have a clear understanding of your choices.
- Know the law: they are versed in the state and federal regulations that can expose your business to serious liabilities. A health insurance broker will help you navigate legal requirements and do the heavy lifting when it comes to implementing your plan and resolving billing, eligibility, and claim issues.
- Know the industry: they have satisfied licensing requirements, which require them to keep up-to-date on the insurance market. A health insurance broker will analyze your needs to help you find the right coverage and assist you with questions, policy updates, and renewals.
Overall, if you decide a group health plan is right for your business, working with a local health insurance broker will help you simplify the selection process and ensure you’re finding the best health coverage possible so both you and your employees can remain happy, healthy, and productive.
Need help finding a group health plan?
If would like to explore your options, our local health insurance experts are here to help you find the right insurance at the right price!