When running your business, one of the most confusing areas that you need to contend with is the health insurance plans and benefits for your employees.
It can be challenging to keep up with changing rules and regulations for health care, especially the responsibilities you have as a business owner.
In this article, we will give you a quick overview of the basics of group health insurance, and how it works.
What is a Group Health Insurance plan?
A group health plan (or group health insurance plan) is a plan for a business that offers a number of employer-provided health benefits and health cover.
In 2020, approximately 56% of the population have group health insurance coverage through their employer or the employer of a family member.
A group health plan is typically set up and maintained by an employer or by an employee organization (such as a union). The group health insurance then provides medical care for employees of the company or their dependents through insurance coverage or reimbursement.
In plain English, it means that a company sets up health insurance that covers those who work for the company.
How do Group Benefits Insurance work?
A business owner chooses a health insurance plan (or plans) to offer to their employees. The health insurance premium costs are usually split between the employer and employee. The employer must contribute a minimum percentage rate to the premiums.
Employees pay a monthly fee (some of which can be subsidized by the company) to be part of the plan. Usually, the group health insurance plans will save employees a lot of money compared to buying their own health insurance policy.
How do Companies Buy Group Health Insurance?
According to the insurance requirements of the Affordable Care Act, businesses with less than 50 full-time employees are considered to be small businesses and are still not required to provide group health insurance coverage to their employees in 2020.
Although it is optional for small businesses to offer group health insurance, employers may be able to benefit from the health care tax credit.
Small businesses can still purchase group health insurance even if they do not qualify for a health care tax credit. For instance, small employers may still be able to deduct the cost of contributing to monthly employee premiums from their federal taxes as a business expense.
Businesses can purchase insurance plans through:
- A licensed health insurance agent or broker
- Online, through a private website
- Online, through the SHOP Marketplace
What are the Different Types of Group Insurance?
Group Health Insurance
People who have health coverage are in a better position to obtain medical care, including preventive services that may help avoid more serious health problems down the road. Having health coverage encourages people to actively maintain their health and improves their access to services that may otherwise be unaffordable.
Group Dental Insurance
Group dental insurance plans provide insurance to an entire employee group. For example, a dental insurance provider may provide dental coverage preventative care treatments such as checkups, cleans, or minor dental work.
Group Vision Insurance
Most group vision insurance covers the cost for routine eye exams and a portion of the cost for prescription glasses or contacts. Employees may need to visit a provider that is in-network to receive the benefits. Or, if they chose to go outside the network, the out-of-pocket cost may be more.
Helping You Navigate the Changes
Health insurance has been in a state of constant change for years. The newer high deductible and HSA plans are starting to replace the traditional HMO and PPO plans. When purchasing a group plan for your company, it is easy to make mistakes that can’t be undone for a full year. This can be a problem for many reasons, especially when you have employees depending on your business for their health insurance coverage.