Small Business Health Insurance FAQs
Here are some Frequently Asked Questions about small business health insurance. If your question is not answered below, please contact us so we can add it to our list.
What is considered a small group?
The definition of a “Small group employer” is a business with 2 to 50 full-time employees. If you have one or no employees, you should consider plans offered through our individual and family insurance. If you have over 50 employees, you should consider larger group insurance.
What evidence does a group need in order to prove that they qualify as a small group insurance?
A group must provide evidence that they are a viable business with paid employees in order to qualify for small group insurance. A Quarterly Wage and Withholding Report (DE 6) would be one example of employment evidence.
Do all my employees have to participate in the plan to be covered for health insurance?
Most insurance providers require that a minimum of 70 percent of full-time employees be covered. If an employee shows evidence that they already have health insurance provided through a spouse, they can be exempt from the 70% minimum calculation.
Can a company offer small group insurance for its management team but not for other employees?
No, if an employer offers coverage, it must extend that offer to all full-time employees. The employer may also include part-time employees (defined as 20 to 29 hours per week) as part of the group, as long as all part-time employees are offered the coverage.
Does the employer have to pay the total cost the small group insurance premium?
No, employers can pay a part of the premium and employees can contribute the remainder. The minimum amount an employer must pay varies by health insurance provider.
What are my rights as a small group employer?
Guaranteed issue. Under most state laws, every small employer has the right to buy any health insurance product sold by an insurance provider to small employers. A product is a package containing a list of benefits (what the plan covers) and a type of service delivery (e.g., HMO or PPO). No company shall be refused health insurance based on the current or previous health conditions of any or all of its employees.
Guaranteed renewal. An insurance provider may not cancel a small group’s coverage just because one or more enrollees gets very sick and generates high health care costs. An insurance provider may only cancel coverage for fraud or failure to pay premiums.
Rating protections. California law limits insurance provider"s ability to charge low rates to groups whose members are in good health and high rates to those that include individuals in poor health. Standard rates may only be based on age, geographic location, and family size. Plans must set actual premiums no more than 10 percent above or below the standard rate. This is called the Risk Adjustment Factor (RAF). The RAF creates a “rate bandA within which the carrier may adjust employer rates for risk factors such as previous use of health services or industry type.
The law also limits an insurance provider’s ability to raise a small employer’s premium due to changes in employee health status or other risk factors. Carriers may not increase the RAF more than 10% in a single year. So, for example, a group that was assigned an RAF of 1.0 in Year 1 could receive an RAF no higher than 1.10 in Year 2.
What is the RAF?
RAF stands for Risk Adjustment Factor. The RAF is the only way an insurance provider may vary rates among different groups to reflect risk factors such as health history, claims experience, and industry. By limiting the RAF to a rate band (between 90% and 110% of the standard rate), the law requires plans to charge each small group premiums that are comparable to those for similar groups.
How do I get a quote?
A census is required before you can get a quote—but it is simpler than it sounds. A census is simply a list of every employeeA>?,??,>s name, zip code, birth date and dependent status. Enter your company’s zip code in the box above and hit the “Get Quote” button. You will then be prompted to enter the census data you just collected. Once you enter that data, you will be able to get quotes and compare plans and prices.
Small Group Health Insurance Application Tips
Before you can apply for small group health insurance you will need to get a quote. To get started on finding insurance for your company, enter your company’s zip code in the box above, then click the “Get Quote” button. You will then be prompted to enter census information for all your employees. This is simpler than it sounds. You just need the birth date, gender, zip code and dependent information for each of your employees. Once you enter that information, a Medicoverage agent will supply you with quotes from various insurance providers. When you have those quotes in hand, you are 90 percent of the way towards getting small group insurance—and we can help you get the rest of the way!
What to Consider When Applying for Small Business Health Insurance
Applying for small group health insurance can be easier than applying for individual coverage because small business insurance has guaranteed issuance. While the approval process is very straightforward, there are a few things that can make the insurance application process run more smoothly. You will have to fill out an employer application and will need address the following in advance.
1) Decide Who You Will Cover.
You have to offer insurance to all full-time employees, but what do you plan to do about your part-time employees? That’s up to you to decide, but you must include that information on your application.
2) Decide How Much You Will Cover.
You can cover 100% of the cost of certain plan, a flat dollar amount towards a certain coverage, or some percentage of the cost of a plan. Each has their advantages and disadvantages.
3) Decide on the Waiting Period Before Coverage Will Begin.
Most companies have a three month probationary period before coverage will begin. You can make this shorter or longer. Also you can have a different waiting period for managers than regular employees, but you must state this in the application.
Once you have your quotes and have addressed the three issues above, you are ready to apply.
Recommended Vision Plans
Please call our Small Group Experts here at Medicoverage to discuss the Best Vision plans for your company: 800-930-7956
Top Group Dental insurance Plans
The top small business dental insurance plans vary by state. When selecting a dental coverage plan for your company, you will want to make sure to look at the lifetime payout and annual payout max. Some of the lower-end plans will have an annual max payout of $500 or less. That will not address the bulk of the cost major dental work for your employees. So when you get a quote, make sure the benefit overview includes the maximum payments.
Do you really want the top dental insurance plan
Top dental plans are expensive and it is unclear how much your employees really value them. Before you focus on dental coverage, you will want to make sure you have solved the medical coverage offerings for your company. Health Insurance is what your employees will care about most and it a much easier to just add a low-cost basic dental with the same provider.
For guidance in this area or to get a quote, contact us.
Qualified HSA Expenses
Once you’ve decided to offer health insurance to the employees of your small business, it’s important to know which procedures and expenses are considered HSA eligible. That is, which procedures your employees can use their pre-tax HSA account dollars to pay for. Some of the medical expenses that are considered HSA eligible are listed below.
Small Business HSA Eligible Expenses
* Abdominal supports
* Abortion
* Treatment for alcoholism
* Supports for arches
* Obstetrician
* Metabolism tests
* Costs associated with operating room
* Optician services
* Outpatient care lodging
* Neurologist
* Legal expenses
* Lab tests
* Ambulance fees
* Acupuncture
* Artificial limbs
* Blood transfusions
* Braces
* Cardiographs
* Blood tests
* Orthopedic shoes
* Oral surgery
* Nursing
* Osteopath
* Prescription birth control pills
* Optometrist
* Removal of lead based paint
* Transplantation of organs
* Spinal fluid test
* Radium therapy
* Handicapped schools
* Registered nurse
* Psychologist
* Splints
* Prescription drugs
* Diathermy
* Elastic hose
* Eyeglasses
* Therapy for drug addiction
* Diagnostic fees
* Dentures
* Dermatologist
* Crutches
* Contact lenses
* Christian science practitioner
* Sterilization
* Fluoridation unit
* Surgeon
* Therapy equipment
* UV ray treatment
* Guide dog
* Treatment for gums
* Health care transportation expenses
* X rays
* Insulin treatments
* Wheelchair
* Hydrotherapy
* Hearing aids
These are only some of the HSA eligible expenses that are covered; others can be found by visiting the IRS website. In order to qualify for an HSA , the first thing your employees must do is select a qualified, high deductible health plan through your company coverage. For further explanation of high deductible health plans, please click here.
Next, when their HSA policy is active, you can then set up the actual Health Savings Account at any qualified financial institution. This is much like opening an IRA. You or your employee (or both) can then contribute money to the savings account. Although there is no minimum contribution required, there is an annual HSA maximum. If you or your employee combined contribute more than the maximum allowable each year, they will incur a tax penalty.
How Does Your Employee use the HSA Account for Expenses?
When your employee has HSA eligible expenses, they simply use the HSA debit card or HSA check issued by the bank. As long as the expenses are qualified, they are considered tax-free.
To obtain quotes for HSA eligible health insurance plans for your small business, start by requesting a quote in the box at the top of this page.
HSA Frequently Asked Questions
Here is a list of frequently asked questions regarding small group HSAs. If you are new to HSAs, check out the FAQ page for individual HSAs. Most all the information will be relevant to small group HSAs as well.
How can an HSA save my company money?
The theory is that HSA compatable plans cost less than most traditional plans because they have high deductibles and low monthly premiums. If your employees select these plans, it will typically cost your firm less money. However, if you choose to contribute an additional amount to each employee’s Health Savings Account, then, depending on the size of your contribution, it may not save your firm any money.
Do companies have to contribute to their employees HSA?
No, but we think you should. Your employees will consider this one of their favorite perqs and will help them cover the cost of the higher deductible.
Can some employees choose traditional plans and others choose the HSA compatible plan?
Yes! You should consider offering a range of plans to your employees. You can usually offer HSAs, PPO and HMO plans at no additional cost.
How can I sign up for a small group HSA?
You will first need to get quotes. Enter your company’s zip code in the box above and click the “Get Quote” button. You will then be prompted to enter census information for your employees. This is simpler than it sounds. Census information is simply the birth date, gender, zip code and dependent information for each of your employees. Once you enter that information, a kind and gentle licensed independent Medicoverage agent will provide you with quotes and the paperwork you need to sign up your company.
HSA Contribution Limits
Each year our government publishes the maximum contribution amounts to an HSA. This number represents the most money that an individual and/or an company can put into a Health Saving Account by law.
2016 Individuals / Families
Maximum Contribution $3,350 / $6,750
Minimum Deductible $1,300 / $2,600
Out-of-Pocket Maximum $6,550 / $13,100
2015 Individuals / Families
Maximum Contribution $3,350 / $6,650
Minimum Deductible $1,300 / $2,600
Out-of-Pocket Maximum $6,450 / $12,900
Group Health Insurance Applications
Currently there are no online applications for small group health insurance. Give us a call and we can get you a quote and all the application docs. You can contact us here.
Anthem Blue Cross California:
Small Group Employer Applications, Small Group Employee Forms
Kaiser California:
Small Group Employer Applications, Small Group Employee Forms
Blue Shield California:
Small Group Employer Applications, Small Group Employee Forms
HealthNet California:
Small Group Employer Applications, Small Group Employee Forms
United Health California:
Small Group Employer Applications, Small Group Employee Forms
Aetna California:
Small Group Employer Applications, Small Group Employee Forms
Group Vision Explained
Thinking about offering vision insurance to your employees but not sure where to start? Our basic guide below attempts to explain some of the key points about small business vision plans and offers some things to consider as you make your decision.
Should I Offer Vision Insurance to My Employees?
Our answer to this question is the same as it was to the question about whether to offer dental insurance: “Yes, but…” What we mean is that offering vision insurance is a great benefit, but offering health insurance is more important. First, not having health insurance is much more risky than not having vision insurance. Second, if you suffer an injury or disease to your eye(s), regular health insurance will often cover your diagnosis and treatment.
Having said that, offering vision insurance is a great way to make your business stand out from the crowd and to attract and keep top employees. In fact, according to the U.S. Department of Labor, less than 30% of American employees receive vision insurance as part of their compensation package. Also, most employees are not expecting to get much more than a basic plan, and basic vision plans are not expensive. As a savvy business person, you know how expensive it can be to recruit, retain, and sometimes replace top talent. Comparatively, offering a decent benefits package can look downright cheap.
Basic Group Vision Insurance Is Not Expensive
As far as benefits go, offering vision coverage to your employees is an inexpensive way to keep your employees happy and productive. Plus, you can get group vision coverage for less than you probably think. You can expect to pay as little as $50 to $70, per employee, per year for an average, basic plan through an insurance carrier, HMO or otherwise. Employees will expect you to contribute anywhere from 25% to 75% of their annual premium.
Can We Get Vision Insurance through Our Business’s Health Insurance Provider?
Some group medical insurance providers do also offer vision insurance as an add-on to their regular services. These vision plans tend to be very narrow, but can also be convenient, as the vision insurance premiums are simply added on to the employee’s health insurance premiums.
What Does Group Vision Insurance Cover?
Like most insurance, vision plans vary in what they offer, and the more you pay, the more benefits you get. However, there are some key services that most basic plans will offer—and a typical small business does not have extra cash to burn on a big, fancy plan anyway. Below are some of those services offered by most basic vision plans.
Annual eye exam
Eyeglass lenses / frames (many plans have dollar or timing limits)
Contact lenses
Discounts on LASIK
Group Dental Insurnace Basics
Considering offering dental insurance to your employees but not sure where to start? We’ve tried to simplify the process by breaking it down into three basic points for you to consider, which are listed below.
Should I Offer Dental Insurance to My Employees?
The short answer is “Yes, but….” What we mean is that dental insurance is an excellent benefit that most employees value—in fact, the next two points below support offering dental insurance as a good idea for your small business. However, simply put, offering health insurance is much more important. Families generally do not go bankrupt and people do not experience financial ruin from being unexpectedly hit by dental bills. But according to a study by the American Journal of Medicine, 62% of all personal bankruptcies filed in the U.S. in 2007 were related to excessive medical bills. Simply put, not having medical insurance is much more risky than not having dental insurance. So if you have not yet offered health insurance to your employees, do that first. Then offer dental insurance next.
Now, there really are excellent reasons to offer dental insurance to your employees. Read on!
Attract and Keep the Best Employees
Surveys have shown that employees value health and dental insurance benefits second only to monetary compensation when considering where they want to work. Offering a nice package of health and dental benefits can help you become an attractive employer that can recruit, hire and keep top-performing employees.
Possible Tax Savings
Some group dental plans may allow employees and your business to deduct the dental insurance payments and reduce payroll taxes. Consult your tax professional in your state for further information on this potential savings opportunity.
Save Money
Because group dental plans function on the concept of pooling risk, they tend to be less expensive than individual dental plans. This allows you and your employees to obtain dental insurance and services at the most competitive rates, thereby saving you money.
What is Small Group HSA health Insurance?
In the insurance world, the terms small group and small business are used interchangeably. So when we refer to small groups, we also mean to include small businesses and small companies. Typically a small group has less than 50 employees.
Companies looking for creative solutions to high-cost health insurance plans should consider the Health Savings Account (HSA). Small businesses can offer HSA-compatible insurance plans to their employees called High Deductible Health Plans (HDHPs). Because these HDHPs have high deductibles, they typically cost less per month than traditional plans. Employees who select them can set up tax-free accounts called HSAs to help pay for their deductible and other qualified medical expenses. The account is owned by the employee and the employee can “take it with them” even if they no longer work for the company.
While the employee may own the account, the employer can also contribute to the HSA as a benefit to that employee. Often times companies agree to contribute the difference between the cost of the HSA and the more expensive traditional plan. With this solution, the employee feels valued with an extra benefit of a partially funded savings account, while the employers feel they can offer an extra benefit at no real additional cost. Under the right conditions, the small group HSA alternative can be a win-win solution for both employee and employer.
Recommended Small Business Insurance Plans
While we cannot say that one health insurance plan will be the best plan for all small businesses, we can offer some good advice for getting the best overall medical coverage package for your company and employees.
1) Don’t just pick one insurance plan.
Many insurance agents will have you select just one plan for your employees. This makes their job easier because they just have to explain one plan to all employees. Offering one plan, however, does not give your staff a lot of options to choose from. The truth is, most insurance companies will allow you to offer all of their plans to your employees including both HMOs and PPOs. With a menu of health care options to choose from, your employees can tailor their benefits to meet their needs. And offering multiple plans by the same insurance carrier will not necessarily cost your company more! Plus, it can make your employees happier, which can ultimately benefit the company.
2) Offer compensation for a baseline plan.
While your company may offer 20 different health plans for your employees to chose from, you can select just one plan for which your company will pay 100%. This “baseline plan” should cover catastrophic health care, offer some preventative coverage, and offer a somewhat reasonable deductible. Most of your employees will chose this plan and will be satisfied with the coverage. If you have a few employees who want enhanced benefits, they can select a plan that will cover more but they will have to pay the difference. That way your company will not be footing the bill for a high-end plan that many people do not truly value.
3) Suggest HSAs
Some of your more savvy employees may select an HSA that actually costs lest than the baseline plan mentioned above. You should encourage this and offer to put the difference between the more expensive baseline plan and the less expensive HSA high deductible plan into a health savings account for them. They will cost you the same amount as all the other baseline plan employees but they will be growing a health saving account that they will really value. See our HSA section for more information.
The goal of our advice above is to allow all your employees to be happy, while also allowing you to stay within your budget. The key to coming up with an insurance package that’s well tailored to your company is selecting the correct insurance company to partner with. Working with a Medicoverage agent will allow you to compare companies, get the details you need, and chose the provider that’s the right match for your company. Visit our Contact page to get in touch with us.
Qualifications for Small Business Insurance
Before you can purchase small business health insurance, you must make sure you qualify.
Most states require a business to have at least two employees to be considered a candidate for small group insurance. Although a few, like Connecticut, require only one person. You will need to have established a legal entity for your business, and you may be required to provide company records and payroll information (DE-6).
Many insurance companies require some type of minimum participation to be considered eligible for small group coverage. For example, Blue Cross of California usually requires that 75% of eligible employees participate in the company plan to qualify for small business coverage. Employees who choose to stay with their spouse’s coverage are not factored into the 75% calculation.
If you think you qualify, gather a company census. This simply means you must collect the gender, birth date, home zip code and dependent information for all of your employees. Once you have that, you can use the quote tool above by entering your business zip code and hitting the “Get Quote” button. You will then be prompted to enter your census information. Once that information is entered, you will be able to get your quotes. If you prefer, you can simply visit our Contact page to speak with a Medicoverage agent in person about insurance for your small business.
Getting Started on Finding Health Insurance for your Small Business
So you’ve decided to offer health insurance through your company. There are many advantages to company sponsored health insurance such as higher employee retention and reduced number of employee sick days. There is quite a bit of flexibility when it comes to offering health insurance through your small business. You can opt to offer one plan that everyone must select, or allow your employees to choose from dozens of plans. Your company can choose to pay 100% of the monthly insurance premium, or some smaller amount such as 50%. You can even select a fixed dollar amount, such as $100 per employee, per month. These options vary by insurance company so you should make sure you speak to an agent to find out which will work best for you.
Your next step should be to check out our Qualifications page to see if your company qualifies for small group insurance.
Welcome to the Small Business Health Insurance Page
You’ve made it to our Small Business Health Insurance Page. In the insurance world, the terms “small group” and “small business” are used interchangeably. So when we refer to small groups, we also mean to include small businesses and small companies.
This section is designed for small companies looking to purchase health insurance for the first time, or for small groups who already have insurance, but would like to consider new options and get some competitive quotes. To make this process easier for you, we have narrowed it down to three easy steps.
Step 1) Research:
Visit our How to Choose a Plan page and our Research page to learn about what’s important when considering and comparing various health insurance plans.
Step 2) Get a Quote:
In order to get a small business quote, you will have to submit a census of your members. This may sound daunting but is actually quite simple. It just means that you’ll need the following information on hand before you use the online small business quote tool above: complete company address, and then the gender, date of birth, home zip code and dependent information for each of your employees. Once you’ve collected that info, enter your company’s zip code into the box at the top of the page and click “Get Quote.” From there you will be prompted to enter the census information you just gathered. Once that is entered, you will receive your quotes.
Step 3) Compare and Buy:
After you receive your quotes, you can compare prices between plans and insurance providers. Our licensed insurance agents can help you during any step of the research or application process. Visit our Contact page to get in touch with us.
