Providing health insurance for employees goes a long way towards building the level of loyalty that reduces turnover. As an owner of a business or a manager in the human resources department, the question is not whether to offer health insurance. Instead, the question is what type of health insurance to offer your staff or team of employees.
The answer to your question is called group health insurance. Now, you have to discover how many employees do you need to qualify for group health insurance?
A licensed and highly-rated health insurance consultant can guide you towards the goal of buying group health insurance.
What Is Group Health Insurance?
Standard group health insurance plans give employees or members of non-profit organizations health insurance coverage. Policyholders enjoy lower premiums than the premiums paid for other types of health insurance policies because the insurance company’s financial risk spreads over a much larger base of enrollees.
Individuals are not allowed to purchase group health insurance plans. It requires a certain number of employees to qualify for enrolling a group into a health insurance plan. Group plans typically require a minimum of 70 percent of employees to be recognized as valid group health insurance.
Differences in group plans mean no two plans are alike. Here are some of the factors that lead to plan differences:
· Insurer guidelines
· Types of plans
Referring to the statistics gathered for the most recent year of 2019, the cost of health insurance in a group plan for family coverage was $20, 576. Employees on average contributed almost one-third of the cost at $6,103. Data collected from the Department of Labor demonstrated that in 2019, 92 percent of Americans had some form of health insurance coverage at some point during the year.
Types of Group Health Insurance
Although health insurance represents the most coveted employee benefit, not every health insurance plan works in the same way. For example, employers have several options when it comes to selecting a group health insurance plan. Let’s review the most common types of group health insurance plans that employers offer their employees.
Affordable Care Act Healthcare Marketplace
Also referred to as Obamacare, the Affordable Care Act (ACA) is perhaps the most recognized type of group health insurance plan. The United States government is the source of the health insurance plan. If all the options of the healthcare marketplace seem overwhelming, the Ohio-licensed insurance brokers at Wilson Insurance Group can guide you through the buying process.
The most important thing to remember is the enrollment period for the healthcare marketplace is between November 1 and December 15.
Multiple Employer Welfare Arrangement
How many employees do you need to qualify for group health insurance is an especially important question to answer because group plans provide employers with more purchasing power. Multiple employer welfare arrangement (MEWA) policies allow smaller businesses to pool resources for the purchasing of health insurance. If your business currently has a government-administered plan and you want to move into a privately run group health insurance plan, then MEWA is the way to go.
Enacted by the United States Congress, the Consolidated Omnibus Budget Reconciliation Act (COBRA) ensures employees have an option to purchase health insurance while they are between jobs. Considered a transitional type of group health insurance, COBRA health insurance policies last up to one and a half years. The plan gives employees the right to purchase health insurance from a former employer, which means the premiums typically are higher than the premiums charged by other group health insurance plans.
Level Funded Health Plans
As a combination of a self-funded and a fully-funded plan, a level-funded health plan operates in the same way as other group health insurance plans except employers assume more of a financial risk. Employers still sign contracts with insurance companies, but they can customize policies to match unique healthcare needs.
Level funded health plans, which appeal to small businesses that have between two and 49 employees, comprise four primary financial components.
· Employee claims
· Administrative costs
· Processing fees
· Group and individual stop gap coverage
Health Cost Sharing
A health cost sharing network operates in a similar manner as a MEWA plan. The most significant difference between the two group health insurance plans is how employers get together to enjoy the financial benefits of increased purchasing power. Unlike a MEWA plan that requires employers to organize a coalition of group health insurance buyers, a health cost sharing network handles the recruitment of employers into the network.
Number of Employees Needed to Qualify for Group Health Insurance
Small businesses qualify for small business health insurance if they have up to 50 employees. For companies that employ more than 50 workers, there are three criteria to meet before meeting the eligibility requirements for group health insurance.
· Meet the minimum standards required to purchase group health insurance
· Exceed the minimum standards for group coverage reporting requirements
· Following every step in the application process
In Ohio, both Medical Mutual and Anthem provide group health insurance for businesses all the way down to 1 employee. However, most health insurance carriers want at least two employees to sign up for a group health insurance plan. Typically, at least one of the two employees must demonstrate the reception of a W-2 form, as well as present evidence of employment. Some insurance companies ask for job descriptions for independent contractors. Under the ACA, employers that have more than 50 employers must report that the companies provide health insurance for their employees.
Definition of an Employee
According to the ACA, employers need at least one employee besides the owner of the business to qualify for small business group health insurance. The one employee must work as a full-time or a full-time equivalent employee.
· Full-time employees work a minimum of 30 hours per week
· Full-time equivalent employees consist of any combination of employees that work at least 30 hours a week
For example, two employees that work part-time at 15 hours per week are considered by the ACA to be one full-time equivalent employee because of the combined 30 hours worked.
What Are the Main Benefits?
Both employees and employers benefit from group health insurance. The most important benefit might be the affordability of the plan.
The more employees in the risk pool, the lower the premiums for each employee. More employees spread the risk, which also is a financial benefit for employers. Group health insurance plans deliver plenty of value that includes the following:
· Extra coverage
· An increase in health care options
· Coverage for pre-existing conditions
· Lower individual policy premium
· Higher-quality health insurance
Tax Breaks for Employers
In addition to lower policy costs, employers also benefit from tax incentives because they offer health insurance to their employees. Qualified companies receive a credit on their taxes, which provides them with partial compensation for buying health insurance for their employees. Many employers roll over the tax savings generated from providing group health insurance into other company health and wellness initiatives. For example, some companies upgrade on-site health facilities with extra cash earned in tax incentives.
Improve Health Care Access
Employees that enroll in a group health insurance program tend to receive better health care services. Most group health insurance plans include preventive services that include the implementation of diet regimens and education that enhance the health of employees. Employees are not restricted to a limited number of health care provider options as well.
Higher Employee Retention Rate
This is another result of group health insurance that benefits both employees and employers. Employees benefit because receiving high-quality, employer-sponsored health insurance is a tremendous morale booster. Happier, more motivated employees produce a higher employee retention rate. Recruiting and developing new employees is a significant cost for any business. Retaining more employees saves your business money.
Here’s what a group health insurance plan can do for your employees:
· Increased appreciation
· More likely to build a career with the company
· Feel valued
· Better connected with the company mission
· Dedicated to making the company stronger
Who to Talk to Explore it?
Working with an Ohio-licensed benefits consultant represents the most effective strategy to find the right group health insurance plan for your company or organization. Instead of you conducting the research and vetting prospective insurers, a benefits consultant does all the work for you.
You gain access to many more health insurance options, as well as spend more time doing what you do best: Taking care of your clients or customers. Some insurance agencies can access hundreds of health insurance companies to find the right plan for your employees.
Here are some of the perks you can expect to receive because you decided to work with an Ohio-licensed insurance agent:
· Free consultation that includes an analysis of the costs that cover your health insurance needs
· Work with a highly-rated professional who is there to answer your questions that concern benefits
· A locally operated agency that has a thorough understanding of the local health care industry
· Timely advice from a professional who stays on top of the latest insurance industry developments
Helping Self-Employed Workers Buy Health insurance
Self-employed professionals that run small businesses frequently ask one question: Why should I spend money on group health insurance? The answers are similar to what larger employers say are the reasons for them to purchase group health insurance.
· Group health insurance for the self-employed is affordable for both the owner and employees
· Reduction in sick leaves and workers compensation claims
· Higher quality of life
· Competitive recruiting advantage
What are the factors a self-employed entrepreneur should consider before buying group health insurance?
· Number of employees
· Type of benefits
· Quality of customer service provided by the insurer
· Cost of premiums
· Ability to customize plans
How many employees do you need to qualify for group health insurance should be the first question you ask when you shop around for health insurance. Companies that employ between 1 and 49 workers are eligible for small business insurance, while businesses that have 50 or more employees qualify for large business group health insurance.
Group health insurance for companies of all sizes makes sense for several reasons. At the top of the list are the financial benefits enjoyed by workers and employers. Both employers and workers pay less in monthly premiums because of the purchasing power of many employees. Employers receive tax incentives to buy group health insurance that reduces the financial burden of purchasing health insurance.
Learn more about group health insurance by contacting the Ohio-licensed agents at Wilson Insurance Group. You can reach us by phone or submit the short online form to schedule a free initial consultation.