January 11, 2019
When it comes to purchasing group health insurance for your small business, the rules are very different to individual or family coverage, and you may not even know if your business qualifies for it. Outlined below are a few basic questions, that when answered, should help to point you in the right direction if you’re buying group health insurance for your employees:
What is group health insurance?
Group medical coverage is usually issued to businesses or organizations with employees and refers to one policy that is given to an entire group of individuals, and sometimes covers dependents of those individuals, too.
Individual coverage has a different set of rules than group coverage, and this is down to the way in which the insurer’s risks are calculated. Insurers determine a premium price based upon the entire group of employees within a small business, and they do so, using general information about them, such as their age or gender.
Are small businesses required by law to provide group health insurance?
There have been substantial changes in the world of health insurance in recent years, and while there is no law that mandates small business owners must provide health insurance for their workers, if you do choose to provide coverage for your workforce, then you will need to be aware of the regulations.
Under the Affordable Care Act, some larger businesses are at risk of incurring penalties if they don’t offer coverage to their workforce, while those companies employing 50 full time workers or less, will not face penalties if they don’t offer health coverage.
Is your small business eligible for group health insurance?
A small employer is defined as one whose business has from 2 to 50 full time workers, and under federal law, these employers are guaranteed group coverage if they opt to provide it for their workforce, irrespective of the health status of those employees. Business owners are usually included as employees, so even a sole proprietorship that has one employee, falls into the small business category, in much the same way as partnerships, since the very definition of partnership is that at least one other person is involved.
Which employees are eligible for coverage?
If at least one full time employee has been offered health insurance by their employer, then the general rule is that the employer must then offer it to all full-time staff. For part-time employees, the employer may opt to provide them with coverage too, and if it is offered to some of them, then again, it must be offered to them all.
The employee’s health status is not taken into consideration when coverage is offered to them, so any employee eligible for health insurance must not be denied coverage due to pre-existing medical conditions.
Also, under group health insurance plans, dependents of eligible employees are usually included in the coverage, and these can range from spouses, domestic partners and children. However, those dependents may not apply for coverage unless the employee themselves has enrolled, and under the Affordable Care Act, group insurance plans are now required to include coverage for dependents up to the age of 26.
For more detailed advice and guidance about group health insurance for the employees of your small business; seek help from a qualified and professional payroll service.