When you’re a small business owner, there are a lot of details that go into running a business that most people conveniently forget to tell you about. One of which is more than likely group health insurance. What is it? How do you get it? How do you get the right plan for you and your employees?
Here are some of the main things to consider when shopping for a group health plan for your business.
What Information Do I Need to Get Group Insurance For My Employees?
The type of group health insurance policies you look for depends on your business and your employees’ health insurance needs.
Wherever you apply for a plan, you’ll need this information to fill out the paperwork for your business:
- Name of your business
- Business address
- Your Tax ID Number
- Your business’s start date
- Your payroll records (You will need to have at least two employees on the payroll. You will be asked to provide a Quarterly Tax and Wage detail report during the application process.)
- Your industry code (or SIC)
- A list of the employees to be covered (and their dependents), including:
- Their full name
- Their gender
- Their date of birth
- Whether or not they use tobacco
- If they’re participating in other insurance programs
- The zip code of their home address
In order to recommend the type of group insurance your business needs, your agent will mostly focus on the employee information list. This list will give them at least some of the demographic information that will determine what types of plans will work for the majority of your employees and what types of plans are available in the area in which they live.
Get quotes for small business group health insurance.
How Much Should I Contribute to My Employees’ Group Health Insurance?
You’ll also need to consider what your budget and your employees’ budgets are for a group health insurance plan. For businesses with over 50 employees, an employee’s health coverage cannot be more than 9.86% of their annual income, under the ACA. While there’s no set amount that a small business employer has to pay, studies showed that in 2017, employers usually paid about 80% of their employee’s premiums or about $6,500/year per employee.
If that sounds like a lot, keep in mind that contributing to employee health insurance premiums are one of the most common small business tax deductions. Plus, you may qualify for a tax credit if you throw a few dollars into keeping your employees healthy. (This is one of the benefits of offering group health insurance to your employees.)
What Kind of Group Health Insurance Do My Employees Need?
Now, it’s time to go a little more in-depth. After all, you can’t tell someone’s health needs just by where they live. So, the type of group health insurance plans you’ll have to consider will largely depend on who your company is made up of. Some important questions to ask yourself as a business owner are:
- Who needs coverage?
- What and who do they need to be covered?
- What is the age range of my employees?
- What kind of industry is my business in?
- How much choice do I want to offer my employees?
- What type of network do I want to offer my employees?
- What do I want to contribute to my employees’ health insurance?
There are three main types of group health insurance that companies usually offer, and each type will be a fit for certain groups of employees and not others.
Our insurance agents are excellent at decoding all of this information into the perfect group health plan for your business. They’ll take the reins on finding your employees great coverage with a conversation, not a list of overwhelming questions. Call us today at 770.497.1200 or fill out our online form to start finding your perfect fit for group health insurance.
Health Maintenance Organizations
Health Maintenance Organizations (HMOs) are plans where the insurance carrier assigns a list (or “network”) of doctors that employees can visit. Doctors and medical facilities that are in-network are covered by the insurance plan. They usually have a deductible or copay due at each visit. However, if someone chooses to visit an out-of-network facility, they’ll have to pay for the entire visit out of pocket.
These plans are usually good for businesses with tight budgets and employees who:
- Are younger
- Are comfortable with a strict list of doctors they can go to
- Have small children
- May need more routine doctor visits (like for a pregnancy)
Preferred Provider Organization (PPO) plans have a little more flexibility. Employees will still have a network of preferred doctors to choose from, but if they choose to go to someone out-of-network, they won’t be stuck with the entire bill. Paying for premiums and doctor visits will cost a bit more, but the cost could be worth going to doctors and specialists that you or your employees already trust.
These plans are typically better for businesses with employees who:
- Already have specific doctors they want to go to
- Prefer to shop around for doctors
- Need to visit specialists on a regular basis
- Are comfortable spending a bit more for the option to choose
Point of Service (POS) plans are a bit of a hybrid plan between HMOs and PPOs. POSs will have a list of in-network primary care physicians (PCPs) to choose from, but that PCP can refer their patient to a wider variety of specialists. The costs of a POS are usually more than those of an HMO, but less than those of a PPO.
However, these plans can work well for employees who:
- See specialists more than primary care doctors
- Want looser restrictions on the specialists they can see
- Are comfortable spending a bit more for the option to choose
Where Do I Get a Group Insurance Plan for my Business?
There are three main ways to get group health insurance for a small business. As with most choices, they’ll come with their own pros and cons, depending on your business and what’s a good fit for your employees.
They also come at different levels of pricing – the plan’s “metal level”. Healthcare plan metal levels range from bronze to silver to gold to platinum. The only difference in these levels, though, are the premium to copay ratio. For example, a bronze plan might have a low premium but a high copay while a platinum plan might have a high premium but a low copay.
The Small Business Health Options Program (SHOP)
Most people know about the public ACA marketplace for individual health insurance, but there’s also a marketplace for small business owners looking to offer insurance to their employees. The SHOP is a group health insurance exchange that each state must legally have available to all of their small business owners. However, each state will offer a different amount of information on the plans that they offer, so it’s important to speak with an agent for the full picture of a given plan.
Private Health Exchanges
These are also called “Purchasing Alliances,” which allow small business owners to partner with each other to get health insurance as a larger group. This allows you to offer more health insurance options to your employees and save money since you and your alliance split the costs of enrolling in the plan. Additionally, even if your employees choose different individual plans from the group insurance plan, your contribution will stay the same.
This is a sort of DIY approach to buying group health insurance. You’ll get to go directly to the source (your insurance provider), but you won’t get the same benefits – and sometimes discounts – as getting a group plan through an agent or a group. Keep in mind that most insurance carriers won’t partner directly with businesses. Even if they do, you’ll be on your own for all of the paperwork, sorting through different kinds of coverage, individual online applications, billing, claims, eligibility, and the renewal process for as long as you have the plan.
That’s why it’s vital to have an insurance expert on your side – someone who can get to know you and your business outside of confusing applications and overwhelming questions. Call us today at 770.497.1200 to get free quotes on group health insurance and have an insurance expert decode the plans that best fit your needs.