Group Health Insurance
PPO, HMO, Deductibles, Co-pays? Understanding group health insurance and which group health insurance plan would be best for your employees can be a challenge. Our agency reviews your current health insurance and employee benefits needs and develops a strategic insurance plan. Showcasing creative plan designs from all the major health insurance carriers like Aetna, Anthem Blue Cross, Blue Shield, Cigna , Healthnet, Health Plan of Nevada, Humana, Kaiser Permanente, Pacificare and Sierra Health & Life.
Our licensed agents will explain in detail the plan options and help you choose the most affordable group health insurance plan for you and your employees.
With group health insurance all employees who enroll are covered by a single policy. The premium for group insurance is based on number of employees enrolling, average age, average sex, SIC code and zip code.
California and Nevada, like most states, have state regulations that a small business with at least two W-2 employees may apply for "guaranteed" group health insurance coverage. This is the major advantage of group health insurance over individual or family insurance. Without "guaranteed" coverage employees would need to apply for individual health insurance and may be penalized with pre-existing conditions or declined coverage.
Companies looking for employee benefits will fall into one of three group classifications; small group(2 – 50 employees), mid-size group(50 – 200 employees), or large group (200+ employees). Each group is regulated by different state statutes and different underwriting rules.
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Group Health Insurance FAQ's
What are Group Health Insurance Requirements?
State regulations and insurance carrier requirements for group health insurance coverage will vary. However, the most common requirements are for a minimum two W-2 employees, a minimum participation of 50% of the employees, and minimum contribution of 50% from the employer towards the employee premium.
What is an HMO?
Health Maintenance Organizations (HMO) are a plan type with a "must use" provider network. All referrals for specialists are coordinated through the primary physician. You have no yearly deductible and the cost for medical treatment is only a co-pay.
When you join an HMO, you choose a primary care physician (PCP) who is your first contact for medical care. The primary care physician provides your general medical care and must be consulted before you can see a provider specialist.
What is a PPO?
A PPO is a Preferred Provider Organization. As a member of a PPO, you can use the doctors and hospitals within the PPO network (in network) or go outside of the network (out of network) for care and pay a larger deductible. With a PPO you do not need a referral to see a specialist.
With a PPO you have provider flexibility, but your total out of pocket costs are likely to be higher because of the yearly deductible and co-insurance.
What is a POS?
POS plans are a dual option health plan that allows you to choose between a PPO or HMO network. This type of plan is the richest plan available in the market because it offers the best of both worlds; an HMO copay cost system if the provider is in the HMO network or you may choose to pay a deductible and coinsurance by visiting a provider in the PPO network. A POS offers health plan flexibility.
What are Mini Medical Plans?
Because of the dramatic increase in health insurance premiums, many companies have been forced to reduce the employee benefits package. Mini medical plans are an excellent alternative to HMO or PPO plans that have become too expensive for the employer and employee.
Mini medical plans can be designed in hundreds of ways and typically offer yearly coverage maximums of $50,000 or $100,000. Mini medical coverage are not designed to be as comprehensive as standard HMO or PPO plans. The advantage is the premium can be as much as 50% less than standard plans and is an excellent alternative to employers who cannot afford standard health plans.
Who is an Eligible Employee?
Insurance companies and state laws will often determine who is an eligible employee. However, a typical eligible employee is a W-2 employee working a minimum 30 hours a week. Employers may have discretion to limit eligibility to an employee who has worked for the employer for a certain amount of days or to include 1099 workers.
What is a Waiting Period?
Waiting periods are established by the employer and require an employee to be employed with the company for a certain amount of time before they are eligible for group health benefits. The waiting period options vary from one to twelve months. When an employee has met the waiting period they will be offered the opportunity to enroll in the group health insurance plan.
What is Open Enrollment?
Group health insurance plans have an open enrollment period each year, during which employee may enroll in coverage, modify existing coverage, or add dependents to coverage. The purpose of the waiting period and open enrollment is to prevent employees from waiting until after they discover a health problem to enroll for coverage.
How much is an Employer Required to Contribute Towards Employee Premiums?
Federal and state regulations typically require a "portion" of the employee premium to be paid by the employer. Most insurance companies have defined "portion" in the underwriting guidelines to be at least 50% of the employee premium.
What are Carve Outs?
An employer may wish to provide health insurance to a specific class of their employees. For example the employer may only provide coverage to salaried employees or employees designated management. Carve outs cannot be discriminatory and must be clearly defined classes.
What is Minimum Participation?
When establishing a new group health insurance plan the insurance company will typically require that a minimum percentage of all eligible employees enroll in the health plan. Most carriers will require 50% of all eligible employees to enroll.
What if an Employer has Employees in Multiple States?
Employers with employees in multiple states will need to comply with multiple state regulations. With each state having different laws and regulations an employer should consult a group health insurance broker to insure compliance.
What is a RAF or MURF?
Initial rates from a carrier are based on average age, average sex, SIC codes and zip codes. The rates are considered "base rates". After the employees have submitted health questionnaires the insurance carrier will add a factor to the rate called a RAF (Rate Adjustment Factor) or MURF (Medical Underwriting Factor). This RAF or MURF could increase or decrease the base rates depending on the overall health of the group.
How Long are Group Health Insurance Rates Guaranteed?
Group health insurance rates are good for 12 or 24 months. An insurance carrier may request from the state department of insurance to increase rates for all employers, but the carrier typically cannot increase a single employer's rate prior to the renewal.
