Group Health Insurance Plans

A group health insurance plan is an employee benefit offered by an employer or employee group that provides health insurance to members of the group. You’re probably most familiar with employer-sponsored group health plans since more than half of Americans get insurance coverage through their employer. Other types of groups that may collectively purchase insurance are unions, professional groups, and membership organizations.

Under the Affordable Care Act (often referred to as Obamacare), there is a distinction made between small and large group health plans based on the number of full-time or “full-time equivalent” employees. According to the new health care law, any employee that averages at least 30 hours per week for more than 120 days out of the year is considered a full-time employee.

If you’d like an in-depth look at the statistics and information surrounding group health insurance, the U.S. Census Bureau has a wealth of resources available.

Currently, any business with 50 or less full-time employees counts as a small business, though that will change to 100 employees in 2016. What this means is that businesses with more than 50 full-time workers are required to offer a qualified health plan to their employees or face a financial penalty. The Affordable Care Act defines a qualified health plan as providing these 10 essential benefits:

• Outpatient care (ambulatory services)
• Emergency care & emergency room visits
• Inpatient care (hospitalization)
• Maternity & newborn health coverage
• Mental health & substance abuse treatment
• Prescription drug benefit
• Recovery & rehabilitative services
• Laboratory services & testing
• Wellness and preventive services (i.e. health screening & vaccination)
• Pediatric care

Visit the Healthcare.gov resource to learn more about the essential health benefits under the Affordable Care Act.

Why Purchase A Group Health Insurance Plan?

Still unsure of whether you should offer employees a group health plan? Here are some of the advantages our clients cite as reasons they believe that a group health plan has benefitted their business.

Affordability – Being part of a group health plan has several benefits, but the biggest one may be the shared cost and affordability. Since groups that seek a collective insurance plan are drawn together by a factor other than the necessity of getting insured (like work, for example), insurance carriers offer more affordable alternatives that if you sought out insurance on your own. This works as a benefit for both employers and employees alike.

Tax Breaks – For small businesses and business owners, offering a qualified group health plan can provide significant tax benefits. Not only will many qualify for the small business tax credit, but businesses can also deduct any expenses paid toward health insurance plans for employees and dependents. In most circumstance, these expenses are completely tax-deductible on both the state and federal level.

Recruitment & Retention – It’s no secret that companies in many industries are starting to use fringe benefits and quality health plans to attract and retain the best workers. In addition to offering a compelling reason to work for a particular company, a good group health plan can reduce the number of hours employees miss from work, as well as improve the overall health, happiness, and morale of workers.