As you assess small business health insurance options, it is common to compare employer group health insurance and individual health insurance. What is the group of insurance and how does it work for small businesses? In this article, we will answer seven common questions about how group insurance works
. Q: What is the group health insurance coverage?
Group health insurance coverage is a type of health policy that is purchased by an employer and is available to eligible employees of the Company, and to eligible family members employees. At present, the majority of non-elderly Americans (56%) have a group health insurance coverage through their employer or the employer of a family member ( Source ).
With insurance group health, the employer chooses the plane (or planes) to offer employees. The cost of the premium is usually split between employer and employee, and there is a minimum percentage rate, the employer must contribute to the premiums
Related :. Comparison of Individual Health Insurance vs. Group Health Insurance
Q: Do small businesses have to offer group health insurance
No. Under the ACA, small businesses (fewer than 50 employees in full time equivalent) are not required to offer health insurance to employees.
Q: Where can small business health insurance purchasing group
Small businesses can buy insurance provided by:
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a license for health insurance agent or broker
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online, through a private website
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online, through the public market SHOP
Tip: If you are looking to claim the tax credit for health insurance for small businesses, you must purchase a SHOP- based map
Q:.? All group health insurance policies are the same
No. With the group health, the employer chooses the carrier, type of plan and coverage terms for the company. In addition, laws regarding how the coverage can be delivered to large groups are different from small groups, and how the contribution rates are determined is also different. We'll get into those details coming
Q:.? What are the margin requirements for the plans of small businesses
Under the Affordable Care Act (aka ACA or Obamacare ), health insurance plans in small groups must meet certain criteria, or coverage levels. Coverage levels are intended to standardize and outline levels are: platinum, gold, silver and bronze. Each metal level floor plan is designed to provide the same level of coverage at enrollee. More on metal bleachers here.
Under the ACA, health insurance plans small group should also cover essential health benefits (EHB) and meet other plan design reforms as the absence of life or annual limits.
Furthermore the new requirements of the ACA, there are several other guidelines applicable to group health insurance plans, including ERISA, COBRA, HIPAA and rules of IRS.
Related: How are the health plans of Small Group Impacted by ACA
Q: Contribution rates are determined for the plans for small enterprises
the ACA has changed the way premium rates are determined for small groups. Currently, small group insurance plans are classified as modified community rating of
With the modified community rating, health plans can vary the rate of community based on limited factors such as age, geography, or smoking status .; and not individual medical history of each employee.
In 2014, the average cost to cover an employee with group health insurance was $ 6.025 / year for a single and $ 16,834 / year for a family. According to reports of Kaiser Family Foundation , costs have nearly tripled over the last fifteen years
Related :. Why the individual health insurance is insurance more affordable Than Group
Q: Who Regulates Group Health Insurance Plans Small
states regulate fully insured group plans but there are some federal regulations all group health plans must follow, including ERISA, HIPAA, COBRA, and ACA.
Each state has an official department of insurance regulation of insurance regulation. In general, the state department of insurance has authority on how insurance operates in the state of the industry, and licenses and regulates the rates and practices of insurance companies, agents and brokers in the state
Q: health insurance is a group the only option for small businesses
No. Small employers are not mandated by the ACA to offer traditional health insurance, which opens the door to more affordable alternatives to Medicare. The most popular alternative is individual health insurance. Employees purchase coverage on their own, and small businesses can continue to contribute through a premium payment plan.
Conclusion
As you evaluate your health insurance options, it is important to understand how Medicare group work. And as the cost and regulation around the increase in group health insurance, it is not surprising that more and more small businesses are transition of employees to health insurance individual.
What questions do you have about Medicare small business? Leave a question or comment below!
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