Group health insurance plans, even small ones, can be very affordable for employees to pay into. Costs for employees can start around $270 per month, or $3240 per year, which is more than three times less than the cost the average American pays into their healthcare annually.
The plan you choose will dictate your rates, premiums, and health care coverage. Sometimes, people assume that their healthcare coverage will diminish by choosing a small group health insurance plan.
However, this is not automatically the case. While healthcare insurance plans offered by private insurance providers, or on the state and federal exchanges, are not very customizable, plans from independent insurance agencies like Taylor Benefits Insurance are.
With an independent agency, you can receive the health care coverage you need at an attractive price. Health insurance companies need to offer attractive and affordable health care plans in order to remain in business. These providers are in competition with each other, while independent agencies are not.
With an independent agency, you can buy health insurance that covers existing conditions, avoids insurance premiums as much as possible, and provides essential health benefits like dental coverage.
The size of the plan does not matter as much as the agency offering the plan.
Insurance is a numbers game, no matter which type of plan you choose. Fortunately for those interested in a small group health insurance plan, premiums are showing a downward trend in the last few years.
According to 2018 research, the average premium per person fell to $409 in 2018 for small group health insurance plans. This is a drop from $416 in 2017; while it might not sound like a huge improvement, it speaks to a trend that small businesses can certainly get behind. It’s worth noting that premiums have risen by about 5% since 2015, but this is to be expected when accounting for inflation.
Small group health insurance is still likely to cost both employer and employee a couple hundred dollars in premiums (assuming that the cost is being shared), but this is a significant improvement over some of the alternatives, both in terms of premiums and deductibles. Moreover, the deductible for small group insurance averages about $3,000, which is much lower than that for individual plans.
When it comes to small group health insurance, there are essentially five different options that can be explored.
The first and most traditional option is a simple group health insurance plan. This option is appealing to those who don’t want to wade through the confusing world of insurance, as it’s doubtlessly the easiest choice. Employers pay a fixed premium, part of which may be paid by the employee, and in return offer benefits to their employees and possibly their employees’ dependents. It’s a straightforward option, but premiums can be quite high for small businesses.
A newer option for small group health insurance gaining popularity is something called the qualified small employer health reimbursement arrangement (QSEHRA). Though it’s a mouthful, the concept is relatively simple thanks to the legislation passed in 2016. Basically, employers can offer a certain amount of money (of their choosing) in benefits to employees each month. Employees can purchase health insurance premiums, pay toward deductibles, and fill prescriptions within this amount and provide receipts to receive reimbursement. This option is wholly customizable to each employee, but adds some extra work all the way around.
Similarly, another option is to invest in something called a group coverage health reimbursement arrangement. This means that an employer would offer group health insurance, but they would also offer a certain monthly allowance to go toward copays, deductibles, and the like. As with any reimbursement program, employees would need to submit proof of their expenditures, and there are stipulations for what is eligible for reimbursement.
The riskiest option for small group health insurance is for a business so self insure. This means that rather than paying premiums each month, employees submit their medical bills and employers reimburse them directly. This option is an obvious gamble, and although it sometimes plays to employers’ favors, it also has the potential to put them out of business.
Finally, associate health plans (AHPs) are a somewhat precarious option in which small businesses can invest. They are precarious due to the fact that a judge ruled against allowing them in 2019, though this is likely to be appealed. Basically, AHPs are when a number of smaller businesses within an industry or region band together to purchase larger group policies.
Some employers are under the misconception that there is a certain threshold in terms of employee numbers that they must meet in order to be eligible for small group health insurance. While this isn’t strictly untrue, the threshold is incredibly low: one employee.
There is, however, a more strict upper limit by which employers must abide. The maximum number of employees that can still be considered a small group maxes out at 50. This means that businesses with more than 50 employees must explore large group health plans and check their eligibility for such plans.
It’s important to note that in order to be eligible for small group coverage, the one employee that is required must meet a number of criteria. Namely, that employee cannot be an owner, and they cannot be the spouse, family member, or partner of the owner. The employee must also be full time, and not seasonal. This can pose some difficulties for family businesses but should be considered before investing in insurance plans.
Cost is always a huge factor when employers are considering different health insurance plans, but there’s more than meets the eye when it comes to comparing small group health and individual insurance.
If you only look at the premiums for each type of insurance, there’s not that much of a difference. On average, a small group plan’s premium will work out to an average of $409 per person; an individual plan premium is an average of $440. Looking a little closer, you’ll notice that the deductible for small business coverage is more than $1,000 less than that for individual coverage, but there’s even more to unpack than that.
Because employers contribute to the cost of premiums, the amount that employees pay for insurance is significantly lower with a small group health insurance plan than an individual one. This makes a small group plan an obvious choice for employers looking to offer their employees a competitive benefits package.
There are many reasons that employers ought to invest in group health insurance plans, but not all of them are immediately evident. Make sure you thoroughly consider all of the ways that a group plan could positively impact your business before making your decision.
First and foremost, group plans save both businesses and employees money. This is possible due to the fact that a larger risk pool translates to lower premiums. Additionally, covering more people under a single plan helps drive down costs so that employers can afford to purchase better insurance. This means that group plans are basically a no-brainer for employers.
Likewise, a small group plan offers a host of benefits to employees. Because the plan is offered through the employer, a portion of the premium cost is generally offset so comprehensive health coverage is much more attainable for each employee. Additionally, employees are able to enjoy a higher quality insurance plan than they would be able to afford on their own.
All of this creates a brighter company culture and more positive work environment. When employees feel valued and taken care of, the quality of their work inevitably improves. Plus, employees are less likely to jump ship when they feel that they’re receiving a quality benefits package.
Finally, tax incentives are another way in which businesses benefit from offering group health insurance plans. This only further solidifies the assertion that group plans are a smart financial move for both businesses and their employees.
The following are popular forms of health insurance coverage that you may decide you want included in your plan. The specifics of your plan and coverage, however, will depend on your health care needs and goals.
The benefits you can include in your group health insurance plan are endless.
The rights and protections you will receive are determined by both the federal and state government you reside under. For federal rights and protections, you can go here for more information. For your rights and protections under state law, you should go websites specific to your state. The state website to go to if you live in New York, for example, is the Department of Health’s website. There, you will find the rights and protections that apply to you.
A great many things are determined under the state law, which determine policies that pertain to your health care, like:
Look to independent insurance agencies like Taylor Benefits Insurance first. Independent agencies can help you get affordable health insurance that covers preexisting conditions, lowers your health care costs, covers catastrophic care, and more. A plan from an independent agency will be better than a plan provided by the federal government or an established health care provider.
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