Group Health Insurance for Small Businesses

Group health insurance for small businesses can be found through insurance providers, independent insurance agencies, or through the state or federal exchanges. With group insurance, you can provide your employees with affordable healthcare coverage, and far better coverage than is found on public plans offered through private insurance providers or the state or federal exchanges.

How Group Insurance Works

Group health insurance, in the context of a small business, is group healthcare which is sponsored by the employer. Even though employers are sponsoring group insurance, employees still need to pay regular fees in order to receive the insurance. Think of the employer as co-paying, since they share the costs.

These costs, however, are typically smaller than what an employee would pay for an individual or family plan. Employees, therefore, should consider asking their employer about group health insurance, as it is cheaper, broader, and more customizable health insurance plan than can be found on the public healthcare market.

Two Main Benefits of Group Health Insurance

Employers often receive tax incentives for providing group healthcare insurance to their employees. These tax incentives are vital to offsetting the cost of the insurance. Self-employed individuals may also qualify for group health insurance, depending on their state.

The second benefit is one of necessity. Although the passage of Obamacare made it illegal to deny people with pre-existing conditions healthcare, this illegality only applies to public insurance purchased through the state and federal exchanges. Even with Obamacare, private insurance companies can deny individuals coverage, or raise their rates and premiums to reflect their health risks.

Luckily, group health insurance for small businesses cannot deny employees based on their health. No one member of a group can be denied coverage. This is a huge advantage over individual healthcare plans that many do not know about. So, not only is group insurance cheaper and broader, but it is also easier to enroll in.

Popular Types of Group Health Insurance

Some of the most popular forms of group health insurance offered in small business group health insurance plans are: Preferred Provider Organizations, Health Maintenance Organizations, and Health Saving Accounts.

Preferred Provider Organization (PPO)

PPOs are managed networks of healthcare facilities, doctors, and healthcare insurance providers. With a PPO, employees can receive healthcare from its network, as well as affiliated third parties outside the network. Employees will be able to receive coverage, but they will be restricted by where they can go for medical attention.

Health Maintenance Organization (HMO)

HMOs are insurance groups that are contracted to provide healthcare to plan enrollees. Enrollees can choose from the various doctors, hospitals, and clinics included in the HMO, which will allow them to receive healthcare for a fixed fee. This fee is paid annually.

HMOs are broader in scope than PPOs, but employees are still required to visit designated doctors, clinics, and hospitals for insured coverage.

Health Savings Account (HSA)

HSA are an accessory to group health insurance. Essentially, employees can contribute money to their HSA accounts, which can be maxed out annually. Investments can be made by individual employees and their employer. The funds in the accounts are invested and the money can be withdrawn to pay for medical expenses that are not covered under a high-deductible health plan.

Which Type of Group Health Insurance Should I Offer?

If your workplace has high deductible group insurance, it may be worthwhile to offer HSAs to your employees. Group insurance plans are cheaper than individual and family insurance plans. Employees can invest the difference in their HSA and receive even more for their money. Not only are they covered by comprehensive insurance through their workplace, but they have the ability to save money to pay for deductibles, should they ever need to use health insurance.

If your workplace does not have group health insurance yet, using an HMO or PPO will depend on the geographic proximity of your workplace, and your employees.