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Businesses with Benefits: Do You Know the Group Health Insurance Laws?

Businesses with Benefits: Do You Know the Group Health Insurance Laws?Group health insurance refers to a single policy typically issued to a business with employees, covering all eligible employees and sometimes their dependents.

The rules are quite different for group coverage versus individual coverage, mostly because the insurer’s risk is 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.

Health insurance is one of the most important benefits an employer can provide to attract and retain employees. Many candidates look at healthcare insurance as in deciding to accept an offer. Keep in mind, healthy employees makes for a healthy business. Where health insurance differs from other group benefits is that there are certain laws governing its implementation in the workplace. Do you know what’s legally required of your business?

What’s Required?

While there is no law requiring small business owners to provide health insurance, the Affordable Care Act has guidelines that business owners should be aware of. If you choose to offer coverage, there are regulations you will have to follow. Large companies (with 50 employees or more) may face penalties if they do not offer coverage under the Affordable Care Act.

Some employers who offer coverage 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.

Small businesses (with 2-50 full-time employees) are guaranteed group coverage should they choose to purchase it, regardless of the employees’ health status. Owners are generally counted as employees, so sole proprietorships with one employee usually fall into this category, as do partnerships without any employees.

Typically, if an employer offers group health coverage to any full-time employees, the employer must offer coverage to all full-time employees. This applies to part-time employed as well.

How Coverage Applies

Coverage applies 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 pre-existing conditions.

Any dependents (spouses and children) of eligible employees are generally eligible for coverage under a group plan. Dependents cannot enroll for coverage unless the employee has enrolled. Under the Affordable Care Act, group insurance plans are required to extend coverage to adult dependents through age 26. Group health insurance offers traditional employer-sponsored group health insurance that bundles all employees into one group. You can choose between the following:

  • Health Maintenance Organization (HMO) plan: Providing savings over open plans, or
  • Preferred provider organization (PPO) plan: Transfers some of the costs of care to policyholders if they choose to go outside the in-network providers.

About A.J. Benet Inc. Insurance Agency

At AJ Benet Inc. Insurance Agency, we make sure that your New York Business Insurance policy includes more than the simple general liability and product liability. Our policies extend in cases where you underlying limits are exhausted. Our team of experts are willing to go the extra mile and not only protect your business but understand it. For more information, call us today at (914) 381-2040.

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