When a prospective employee looks at your business, one of the key points that they are going to look at is your Group Health package. Your group health insurance is crucial in obtaining and retaining quality employees and is something that you as an employer need to take seriously. Below are some areas that we think will help you as you make this important decision for your small business.
• Eligibility requirements for Group Coverage
• Type of Group Plans Available
• Group Health Insurance Definitions
• COBRA and post-termination group health insurance
• Additional considerations
Eligibility Requirements
As with all insurance plans, there are certain requirements that your small business needs to meet. Each year, you as the employer should verify that you group is still eligible for coverage. Keep in mind that your insurance provider can review your application whenever you start a new plan and may audit your company each year at renewal. So it is a good idea to stay on top of these requirements.
The following items are also necessary for compliance:
1. At least 75 % of the employees must be employed in Auburn
2. Only 25 % can waive coverage without having other coverage elsewhere
3. The employer must pay at least 10 % of the premium
4. The employer has the right to decide on a waiting period for new employees to enroll in the plan - 0 to 6 months in Auburn
5. The employee must be working full time (a normal work week being 25 hours or more) for compensation
Type of Group Plans Available
• HMO: This managed Care plan gives your employees the security of lower out-of-pocket expenses, comprehensive coverage and virtually no claim forms to fill out. Employees choose a primary care physician who will manage medical care and refer employees to specialists and hospitals within the network.
• POS: Your employees have the freedom to use the managed care network of physicians or choose doctors and hospitals outside the network. In network, the employees select a primary care physician (PCP) to coordinate their needs and to refer them to in-network specialists. By going out-of-network employees may encounter higher out-of- pocket expense and more paperwork.
• Direct Access: This open access plan provides employees with direct access to all primary care and specialists within the network without a referral. They do not need to select one primary care doctor. While employees have the freedom to choose from doctors and hospitals within the network, they may also go outside the network. By going out- of-network, they will encounter higher out-of-pocket expenses. Employers can choose from various plan designs to meet their budget and benefit needs.
• PPO: This preferred provider organization gives the employees the largest selections of network doctors and hospitals. If the employee uses the network, he receives a higher level of coverage; if he chooses out-of-network physicians or hospitals, he pays a higher share of the cost. Various plan designs are available.
• HSA: A Health Savings Account is like a 401K for healthcare. It is a tax advantaged personal savings or investment account that individuals can use to save and pay for their qualified healthcare expenses, now or in the future. Paired with a qualified high deductible plan, the HSA is a powerful tool that empowers consumers to be more actively involved in their health care decisions. Resource Insurance Group has the necessary knowledge and expertise to assist both employers and employees who are considering Health Savings Accounts.
• Dental Coverage: May be purchased as a standalone plan or as a rider (an add-on) to a group health plan.
• Vision Coverage: May also be purchase as a rider (an add-on) to group health plans.
Important Definitions:
Office Visit Co-Payment: Employee payment for office visits (Options from $5-$50)
Deductibles: An amount that may be deducted by the insurance carrier from the total that they will pay toward hospital and other services, in-network and/or out-of-network (Options from $500-$2500)
Network of Participating Physicians: Doctors who are contracted with the plan
RX Coverage: Coverage for prescribed medications. Many plans include 50 % coverage. Tiered RX plans may be available for Generic/Name Brand/Non-Formulary Drugs (i.e. $10/25/50)
Guaranteed Issue: In Auburn, no one can be declined due to a pre-existing condition. They may however, be subject to a pre-existing condition exclusion for six months if they have had a lapse in coverage of over two months.
COBRA:
COBRA (Consolidate Omnibus Budget Reconciliation Act of 1985) requires businesses to extend their group health insurance coverage to an employee who leaves or is terminated for reasons other than cause. The employee must pay the premium to the employer, who in turn includes it with his monthly payment to the company.
In Auburn, companies with two to nineteen employees must continue to provide coverage for twelve months after termination. The coverage must also be offered to the employee’s spouse and child. All potential beneficiaries must apply for continued coverage within 30 days of termination.
Additional considerations for the employer:
An employer must offer coverage to all eligible employees. Where the employer pays 100%, all employees must enroll unless they sign a waiver that they have other coverage. In plans where employees are asked to contribute, employees may waive coverage if they have other health insurance coverage or cannot afford coverage. However, if more than 25 % of the group declines coverage without other health insurance elsewhere, it will make the entire group ineligible as the group is not in compliance.
It is crucial that you understand what is required for you to provide your employees with the best possible coverage that you can afford. We at Resource Insurance Group understand that Health Insurance is getting more and more complicated with each day. We will do everything that we can to help you understand so don’t hesitate to give us a call or visit our office with any questions you have.