How many employees do I have to have in order to be a group?
Typically, a minimum of two employees or 75 percent of the eligible employees who do not have other coverage, whichever is more. However, some programs will allow as little as 60 percent participation.
I am a sole proprietor. Do I qualify for group coverage?
Yes, if you had one additional employee on payroll for more than half of the last calendar year quarter.
I have a partnership/corporation, but neither of us draws regular paychecks. Do we qualify for group benefits?
It is very possible, as long as there were at least two partners or officers of the corporation for more than half of the last calendar quarter.
What is the minimum amount employers must contribute toward the cost of premiums for their employees?
The general rule is 50 percent of the employee’s premium; however there are carriers that require 75 percent. There are some limited benefit plans that can be as inexpensive as $25 per month.
Do my employees have to contribute toward the premium?
No, however the growing trend is to have the employees engaged in the cost of insurance.
Are there tax benefits of group medical plans?
The entire premium paid by the employer is 100 percent deductable as a business expense.
Are my rates based on my group size or health conditions?
Both. If you are a group of between two and 49 employees, a carrier can raise or lower your rates 10 percent based on the size and health of your group.
Can my employees be denied coverage in a group policy?
For groups of two to 49 employees, as long as all the “group” criteria are met, then a carrier cannot deny any employee coverage, no matter what medical condition they have.
What is the cutoff between small and large group?
A small group is between two and 49 employees; a large group is 50-plus.
Which plans are most accepted by providers in this area?
This changes from year to year, but for now the most accepted carriers are: Aetna, Blue Cross, Blue Shield, Cigna and Pacificare/United.
Can my employees get better rates if they go out on their own and buy individual insurance?
Individual plans can be less expensive at times because they underwrite individually. But they also can deny anyone based on health conditions. So it is not “guarantee issue” like group products are. The benefits are often different as well.
Why do I need an agent/broker?
An agent/broker can market your group for you on an annual basis at least to make sure you are still with the right carrier/plan. He or she also performs other duties such as helping with administration, materials, claim problems, provider issues, COBRA issues, enrollment meetings and employee education.
Can I get better rates by shopping online, without an agent/broker?
No, the rates and plans are identical online as they are in an agent’s office.
Can I switch agents without changing plans?
Yes.
Can I have employees on different plans within the same carrier?
Most carriers will allow small groups to offer different plan options; however, you need to be careful not to discriminate.
Can I have different contributions/benefits for different “classes” of employees?
Yes, as long as you do not discriminate within the classes.
Do I have a one-year contract with my insurance carrier?
Some carriers rates are guaranteed for only six months at a time; however most are guaranteed for one year. You can move from one carrier to another at any time, as agreements are month to month.
What is the difference between “PPO” and “Non PPO” providers?
PPO is also known as “IN Network.” These are the providers who have a contract with the carrier. Non-PPO, or “Out of Network,” are all the other providers who DO NOT have a contract with that carrier.
What does UCR mean?
UCR is short for Usual, Customary & Reasonable. This term is used when a patient is utilizing “Non-PPO” providers. Some carriers will reimburse the patient/provider based on the UCR charges in their area. Other carriers will reimburse only a percentage of their contracted rate (much less than UCR).
What is an EOB?
An EOB (or Explanation of Benefits) is what PPO patients receives from the carrier each time they have a service rendered by a provider. It details the “billed amount," the “allowed amount” (the carrier’s negotiated rate), the “amount NOT allowed” (or excluded), and finally the “patient’s responsibility.”
How do I know if I have a federal COBRA group or a CAL COBRA group?
If your group was less than 20 employees for at least half of LAST year, you are a CAL COBRA group. If you were more, then you are federal.
What is the difference between co-pays and co-insurance?
Co-pays are a set dollar amount that your employees pay (usually upfront) at the provider’s office (usually ranging from $10-40). Co-insurance is the percentage amount that your employees pay (sometimes after a deductible) for certain services (hospitalization, etc). These range from 10-50 percent. Their co-insurance ends at the “out of pocket maximum” amount and begins again each calendar year.
What do I need to do to get started?
Contact a local agent/broker to obtain quotes from all the carriers. The agent/broker will need a current “census” of your eligible employees (name, age, dependent status). See our sample quote request.
What do I need to submit to the carriers to get approved?
Enrollment forms, contract, check for the first month’s premium, a copy of your last quarter’s wage and withholding report (or articles of incorporation.)
How long does it take to get approved?
If all the paperwork is in order, it takes only a few days.
