If you’re thinking about providing your employees with group health coverage, there are several requirements you should be aware of to ensure you are following state and federal healthcare laws.
Most small business owners know that offering health insurance to their employees provides several benefits to both their workers and their own businesses. Depending on the size of your business, you may be required to offer healthcare coverage to your employees.
If you’re a small business, however, offering group coverage may be a choice. Yet there are laws in place you must follow should you decide to provide this coverage.
Looking for and purchasing a group policy can be complicated, considering the number of health insurance providers and choices you have available to you. Factor in any requirements you must meet, and the process can be overwhelming.
Below we’ll help you get started by outlining what’s required of you, beginning with:
- What group health insurance is
- Some of the most important requirements you should know, such as:
- Whether you have to offer insurance
- If you can qualify
- Who you must provide coverage to
- Resources that can further help you understand these requirements
What Is Group Coverage?
Though group medical coverage can cover several individuals, it’s actually a single policy issued. This single policy covers all eligible employees and their dependents should you choose to cover them as well. Individual policies, though a single policy as well, only covers a single person or a family.
Group coverage is most often used in businesses or organizations. The rules between group and single policies are very different, as are the rates for each. If you’re a business owner, you can expect the insurer to determine a premium price based on risk factors for your group as a whole, with each person in your group paying the same.
Whether You Have To Offer It
One of the most important requirements for group health coverage is whether you have to offer it in the first place.
The Affordable Care Act requires that small businesses offer health insurance to their employees if they employ 50 or more full-time-equivalent workers. Though the ACA’s individual mandate is no longer required, the employer mandate is still in place.
If you’re a business that hires seasonal employees, determining how many full-time employees you have can be more difficult. This FTE calculator will help you determine whether you are required to offer group health coverage.
Whether You Can Qualify
Businesses with fewer than 50 do not have to offer health insurance to their employees. However, that doesn’t mean it’s not required that it’s offered to your business.
Even the smallest-sized businesses can benefit from having group health coverage, and health insurance companies must offer that option to you.
Even if you just have one employee, you can qualify for group health coverage. Under federal law, a “small employer” is defined as a business with 2 to 50 full-time employees. Owners typically count as one employee, so if you have one worker or even a partner, you can qualify.
Our article, Health Insurance For Small Business With One Employee, further explains what information you need to get group health coverage if you’re a small business owner with a partner or one employee.
Who Must Receive Coverage
Another important requirement you should know is that if you provide group health coverage to your full-time employees, whether you must under law or are choosing to do so, you must provide coverage to all of your full-time employees.
The same goes for workers who only work partial time. While you don’t have to offer health insurance to part-time employees, if you decide to offer a healthcare policy to them, you must offer it to all part-time employees.
You cannot pick and choose who you want to provide coverage to among your employees, even if some have medical conditions.
In California, it’s also important to note that any group policy that covers spouses must extend that eligibility to registered domestic partners. Under most group plans, dependents of eligible employees are eligible for coverage.
More information about dependent coverage can be found in our article, What You Should Know About Small Business Health Insurance Coverage.
Resources That Can Help
There are many resources available that can help you better understand requirements associated with providing group health coverage to your employees.
HealthCare.gov provides information about health insurance products and services for a small business and its employees, including information about reimbursements and tax-favored health plans to help offset any costs for the premiums.
Working with a trusted broker or agent who specializes in small business health insurance can also provide a wealth of information and help clarify any questions you have regarding what is required of you.
Professional insurance brokers can provide several benefits for your business, including:
- Their knowledge of the most up-to-date healthcare laws that could impact your business
- Their relationships with multiple carriers to provide you with options
- They’re there for you throughout the duration of your policy to answer questions - not just when you’re searching for one
More reasons why working with a professional insurance broker are outlined in our article, The Best Health Insurance Brokers For Small Business.
Bottom Line
Group health coverage plans can offer numerous benefits for both employees and small businesses. Whether you’re required to offer coverage or not, you must follow several requirements to ensure you are meeting any state or federal laws.
A health insurance broker experienced in working with small businesses can help answer any questions you have about these requirements and guide you through the process of finding the right policy for your employees and business.
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