Group Health Insurance
We provide insurance to members of a formal group such as employees of a firm or members of an association. Group insurance is distinguished from individual insurance in which single policies are sold to one person at a time and from social insurance (e.g., unemployment insurance, social security), which is sponsored by the government.
Because every group is different, we take the time to find the right plan for your group. To find out more information, or just check out the rates for group health insurance, contact us today!
Are all employer group health insurance policies the same?
Historically, insurance has been regulated in large measure by each state. Therefore, the laws regarding health insurance offered by the different types of employers can vary significantly from state to state. However, with the implementation of the Affordable Care Act (ACA), the federal government also regulates insurance. This is particularly true for individuals purchasing coverage on their own as well as for smaller employers with 50 or fewer employees.
Also, different types of employers may offer different benefit plans. Millions of Americans work for small employers, which for health insurance purposes are generally those with 50 employees or less. Millions of other Americans get their health insurance coverage through large employers. Generally, those are businesses with more than 50 employees. The laws about how coverage can be issued to large groups are different than those for small groups, and the way that premium rates are determined is also different.
What are the coverage requirements for large employer groups?
Large group health insurance contracts also have to be offered on a guaranteed-issue basis, so a health insurance company cannot reject a large employer group based on its claims history. No individual employee who is eligible for benefits can be excluded from large group coverage based on medical history. Federal law mandates all group insurance contracts, including large group contracts, be renewed every year at the employer’s discretion, unless there is non-payment of premium, the employer has committed fraud or intentional misrepresentation, or the employer has not complied with the terms of the health insurance contract.
What are the coverage requirements for small employer plans?
At this time, small employers are not required to offer health insurance to employees. Many do so because they believe that health insurance coverage is a valued employee benefit that helps employers attract top employees and retain them. State and federal laws apply to varying degrees – again based on factors including the number of employees, the type of business and whether an insurance company is providing the coverage.
The Affordable Care Act requires that insured small group plans offer health plans that meet certain benchmarks. The benchmarks are represented by the metal levels of platinum, gold, silver and bronze. Each metal level tier plan is designed to provide the same average level of benefit to an enrollee.
The tiers are based on the percentage the plan pays of the average overall cost of providing essential health benefits to members:
Platinum plans are the most generous and more expensive. These are designed to pay as much as 90% of medical expenses
Gold plans are designed to pay 80% of medical expenses
Silver plans are expected to pay 70% of medical expenses
Bronze plans are expected to pay 60% of medical expenses.
It’s important to note that the metal tiers reflect what the plans will pay on average. These percentages are not the same as coinsurance, which calls for an individual to pay a specific percentage of the cost of a specific service.
There are other myriad requirements that apply to group health in addition to those required by the ACA. There are laws that address benefit communications (ERISA), claims appeals (ERISA) and portability of coverage (HIPAA) among others.
Both the ACA and the federal HIPAA law mandate that no matter what pre-existing health conditions small employer group members may have, no small employer or an individual employee can be turned down by an insurance company for group coverage. This requirement is known in the insurance industry as “guaranteed issue.” In addition, each insurance company must renew its small employer health plan contracts every year, at the employer’s discretion, unless there is non-payment of premium, the employer has committed fraud or intentional misrepresentation, or the employer has not complied with the terms of the health insurance contract.
Small employers may purchase insurance plans that are provided through the new SHOP markets operating in each state or in the market outside the SHOP. Health insurance plans that are offered in the SHOP exchange are generally also available in the market outside of the SHOP. It’s important to note that an employer that wishes to claim the Small Business Health Insurance Tax Credit must purchase a SHOP-based plan.
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