Group Health Coverage Basics for Small Businesses
Offering health insurance to your employees may sound like an overwhelming process — but it doesn’t need to be. Once you’ve identified your business’s needs and know the basics of group health insurance, the rest is easy. So, what do you need to know first?
What’s the difference between group and individual health plans?
According to the U.S. Department of Labor, “A group health plan is an employee welfare benefit plan established or maintained by an employer or by an employee organization (such as a union), or both, that provides medical care for participants or their dependents directly or through insurance, reimbursement, or otherwise.”
In other words, a group health plan is designed to cover a group of employees, but each enrollee has their own plan with benefits – and the plan’s monthly premium is calculated differently than if it were purchased as an individual health plan.
The monthly premium for all health plans is determined by the perceived risk of the carrier in offering coverage. With a group health plan, the group seeking coverage has their risk pooled together as one, which in some cases, may lower the monthly cost.
Unlike individual plans, group health plans are also available in different types designed to help your business save the most money and make the best coverage decisions. To learn more about these different plan types and ways that your business can save money on group health coverage, feel free to check out this group health webinar.
As a business owner, do I have to offer group health insurance to my employees?
Depending on the size of your business, the answer could be no. The Affordable Care Act (ACA) stated that businesses with fewer than 50 full-time employees are not legally obligated to provide health insurance to their employees — but many choose to regardless.
Looking for a better benefits package is one of the most common reasons people change jobs. And if your business doesn’t offer a health insurance benefit, it may give current and prospective employees reason to look somewhere else for employment.
If you are federally mandated to offer health insurance to your employees, you will need to ensure you are following the rest of the ACA’s rules and regulations for small businesses.