Our objective is to work with employers to implement the best benefit packages to meet your strategic business goals. Many employers offer group health insurance coverage because ultimately, an attractive benefits package helps employers appeal to top employees and retain them. An employer’s benefits package usually offers medical insurance and may include ancillary coverages such as dental, vision, life, short term disability and long term disability.
What is Group Health Insurance?
A group health insurance plan is a key component of many employee benefits packages that employers provide for employees. The majority of Americans have group health insurance coverage through their employer or the employer of a family member. One of the advantages for employees in a group health plan is the contribution most employers make toward the cost of the health coverage premium – in many cases, employers pay the monthly premium or a portion of the monthly premium for an employee. Another advantage is that most employers have established Premium Only Plans (POP plans) that allow employees to pay any employee-required contributions to premiums on a pre-tax basis. Between the employer contributions, which aren’t taxable for employees, and the POP plan, employer-provided health insurance is significantly subsidized due to these tax breaks.
The Affordable Care Act (ACA) requires that insured small group plans offer health plans that meet certain benchmarks. The benchmarks are represented by the metal levels of platinum, gold, silver and bronze. Each metal level tier plan is designed to provide an average level of benefit to an enrollee.
The tiers are based on the percentage the plan pays of the average overall cost of providing essential health benefits to members:
- Platinum plans are the most generous and more expensive. These are designed to pay as much as 90% of medical expenses
- Gold plans are designed to pay 80% of medical expenses
- Silver plans are expected to pay 70% of medical expenses
- Bronze plans are expected to pay 60% of medical expenses.
These percentages are not the same as coinsurance, which calls for an individual to pay a specific percentage of the cost of a specific service.
There are other myriad requirements that apply to group health in addition to those required by the ACA. There are laws that address benefit communications (ERISA), claims appeals (ERISA) and portability of coverage (HIPAA) among others.
Both the ACA and the federal HIPAA law mandate that no matter what pre-existing health conditions small employer group members may have, no small employer or an individual employee can be turned down by an insurance company for group coverage. This requirement is known in the insurance industry as “guaranteed issue.” In addition, each insurance company must renew its small employer health plan contracts every year, at the employer’s discretion, unless there is non-payment of premium, the employer has committed fraud or intentional misrepresentation, or the employer has not complied with the terms of the health insurance contract.