Group Health Coverage for Small Businesses
When buying health insurance coverage for employees, a small business has different rules to follow than when buying coverage for a family. For instance, individual medical coverage is a single medical policy issued to either a family or one person. It is important that these rules are followed.
What is Group Health Coverage?
Group health coverage is defined as a single medical policy issued to one group. The group has employees that covers all eligible employees and possibly their dependents. The rules for obtaining group benefit plans scottsdale az are also different than looking for coverage for an individual.
Different Rules for Group Coverage
The rules are different for a business owner seeking group benefits than individual coverage. For instance, risk is calculated differently. The insurer bases individual coverage on premium rates. These rates depend on many factors such as a person’s medical history and their habits. That’s why two people the same age can have different rates if one is a smoker and one isn’t.
Group rates aren’t determined on these factors because the pool of employees is so diverse. Health benefits for a small business are determined by a premium price based on risk factors for the entire group. The insurer uses general information on group members such as gender and/or age. According to the law, insurance companies are required to offer medical coverage to small businesses.
The Affordable Care Act Doesn’t Require Small Businesses to Provide Health Insurance
A small business with fewer than 50 full-time employees is not required to provide health coverage for employees. Many do offer the coverage because it is a competitive edge for them to obtain the best workers. Benefits can often determine whether a person accepts employment from a small business or large corporation. For a small business that decides to purchase health insurance for their employees, they must follow specific rules and regulations.
Those Group Members Eligible for Health Coverage
If a small business offers their one full-time employee health coverage, it is required to offer all full-time employees health coverage. Each small business has an option to provide health coverage to part-time employees. A part-time employee is anyone working less than 30 hours per week. The same rule applies to part-time workers. A small business owner can’t give only one part-time worker health benefits. They must offer the coverage to all part-time employees.
The Premium Small Business Owners Must Pay for Group Plans
It is important for a small business owner who wants to offer group coverage to understand their required premium amount. Some employers decide to pay the full premium for their employees. Others will pay a portion of the premium and have their employees pay the rest. The Affordable Care Act does offer small business tax breaks to offset the cost of paying insurance for their employees.
Selecting Group Plans in Arizona
It’s important to select the right group plan. Search for and compare different group plans to determine the cost and benefits. Some plans may offer a higher price, but better benefits.