If you’re a business owner, you know that shopping for group health insurance is an entirely different ballpark than shopping for individual coverage or even workers’ comp. A lot of questions pop up that you may have never considered. What kinds of group health insurance can I offer my employees? What will group health insurance cost for my business? What kind of group health insurance fits my business and my employees?
It seems like there are too many types of coverage out there and not enough time in your busy schedule to go through them all. So, we’re here to walk you through some of the basics of group health insurance.
What is Group Health Insurance?
Like the name implies, group health insurance is a single health insurance policy issued to a group of people. These policies usually allow individuals to get health insurance at a reduced rate because the risks are spread out to multiple people. Basically, instead of an insurance company worrying about one person having multiple health problems at once, a group health insurance plan allows them to handle just one health issue at different times for multiple people.
Group plans don’t require the participants to have a physical exam to qualify; it just requires that a person enrolls within the assigned eligibility period. It can also give you more bang for your buck. For example, paying a group insurance plan that starts at $200 per month may offer more coverage than buying your own individual plan at the same price.
Insurance carriers consider 2 or more people to be a “group,” including business owners. So, even if you’re a small business, you can qualify for a group health insurance plan.
What Are the Types of Group Health Insurance?
When most people think group insurance, they usually think of big-shot companies who are able to pay the full premium amounts for each and every employee. However, there are other, more flexible options for group healthcare plans that will fit your business. Our insurance agents are experts in every type of group health insurance plan and can walk you through the perfect coverage that will work well for your business and your employees. Call 770.497.1200 now or fill out our online form to compare quotes on the best group health insurance plans.
Until then, here is a basic rundown for each option.
Fully Insured Employer Groups or Large Employer Groups
Both terms mean essentially the same thing to insurance carriers and are probably the most common form of group health plans for larger employers. Fully-insured or Large Employer group plans allow the company to partner directly with the insurance carrier and requires the employer to pay all or part of each employee’s insurance premiums (or monthly rates).
The company usually chooses some form of HMO or PPO (more on those in a minute) and pays a fixed annual rate to cover monthly employee premiums. If the employer chooses to only pay a part of the premium for their employees instead of the full amount, the employee portion is the only amount that will change based on the number of employees that participate in the plan that year.
Small Employer Group
Insurance companies can sometimes break down Large Employer Groups into Small Employer Groups to more accurately predict the risk of covering the larger group as a whole. The smaller employer groups allow insurance companies to save money because instead of estimating the costs of insuring a large group, they can break down specific costs of insuring multiple small groups.
However, you don’t have the be a part of a big corporation to reap the benefits of a Small Employer Group plan. Insurers can also offer these rates to singular small businesses by grouping businesses of a similar industry together under one plan. This allows each of those small businesses to partner with the insurance carrier and still receive cheaper rates on plans with higher coverage.
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Health Maintenance Organization (HMOs)
You may have heard of HMOs before or seen the letters tacked on to the end of a plan name on your insurance card. All this means is that your policy is part of a group plan that selects or lets the individual select a network of doctors and medical facilities. Anyone who is covered by an HMO plan is called an “enrollee.”
For example, let’s say that you, as a business owner, choose a network of general practitioners for your employees to choose from. Employee A would then look at a list of primary care doctors from that list and choose one. If Employee A then needed to see a specialist, the primary care doctor would then refer Employee A to an in-network specialist for that HMO plan. If Employee A wanted to see any other out-of-network specialists or primary care doctors, the insurance would not pay for the visits – the employee would simply pay the full cost out of pocket.
This is because the monthly premium pays for certain health services in advance. HMOs are then cheaper than other types of healthcare plans but are more limited in which doctors you can go to.
Preferred Provider Organization (PPOs)
PPO plans were made to offer more choice to employees than HMO plans. PPOs also have preferred medical provider lists, but they allow enrollees to choose doctors and facilities outside of the list without having to pay the entire cost out of pocket. However, they may be more expensive depending on how your business chooses to divide the cost of the monthly premium.
PPOs premiums are different because the contracts formed with in-network healthcare providers have been negotiated so that they perform services at a negotiated rate, not at a pre-paid amount. PPOs also have more associated administration costs, which will raise the monthly premiums.
PPO plans also tend to be more expensive for your employees in the long run. In addition to monthly premiums, enrollees spend more on copays and other healthcare service costs. This is especially true if an out-of-network provider charges more than what the insurance carrier decides is a reasonable or customary fee for the medical service.
Group healthcare can be a tricky subject and finding the right plan that will fit your business’s budget and your employees’ needs can be even more frustrating. That’s why our insurance experts are here to make shopping for these options quick and easy. We’re dedicated to learning your business so that we can give you multiple, free quotes on group health insurance plans that are tailored to what you and your employees need.
Call 770.497.1200 today to speak with an insurance expert about your group health insurance options, or fill out our online form to start your best group health insurance experience.