Group medical insurance refers to a single policy issued to a group that covers all eligible employees and sometimes their dependents. The rules are quite different for group coverage versus individual coverage due to the risk being calculated differently.
With groups such as businesses, insurers determine a premium price based on risk factors balanced over the entire group, using general information on members of the group, such as age or gender.
Is Insurance Required?
While there is no law requiring small business owners to provide health insurance, the Affordable Care Act encompasses attributes that small business owners should be aware of when deciding whether to purchase insurance for their employees. There are regulations you must follow when offering coverage. If you have at least 50 full-time-equivalent employees you may be penalized if you don’t offer health insurance.
Who Is Eligible?
Under federal law, small employers are guaranteed group coverage should they choose to purchase it, regardless of the employees’ health status. A “small employer” is defined as a business with 2 to 50 full-time employees. Owners are generally counted as employees, so sole proprietorships with one employee usually fall into this category, as do partnerships without any employees
Generally, if an employer offers group health coverage to any full-time employees, the employer must offer coverage to all full-time employees, and if the employer offers coverage to any part-time employees, all of them must be offered coverage.
These rules apply regardless of the medical condition of the employees. In other words, any eligible employee can’t be denied coverage based on previous medical problems, known as preexisting conditions.
Dependents (spouses, children, and in some cases, unmarried domestic partners) of eligible employees are typically eligible for coverage under a group medical insurance plan. However, they cannot enroll for coverage unless the employee has enrolled. Plans extend coverage to adult dependents through age 26.
What You Have to Pay
Some employers decide to pay the full premium, while others require employees to pay a portion. When considering what portion of the premium to pay, employers should be aware that the Affordable Care Act offers small businesses tax credits to help offset the cost of insurance. To qualify for a tax credit of up to 50 percent of premium expenses for any two years, you must pay at least half of employees’ healthcare premiums and have fewer than 25 full-time-equivalent employees who earn an average of $50,000 or less per year. Speak with an agent to find out about all your group medical insurance options.
About Arroyo Insurance Services
Arroyo Insurance Services was officially established in 1986, but we have roots dating back to before 1950. One of California’s leading client-oriented and independently owned agencies, we have over 140 employees with a combined experience of over 450 years, spread across 11 locations. We are committed to providing the best insurance and risk management services at the most competitive premiums, and backing it with hands-on service tailored to our customers’ needs. For more information on how we can mitigate your risks, contact us today at (877) 220-4769.