Providing employee health insurance is a dilemma for most small business owners.
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On the one hand, business owners want healthy, happy employees. But on the other hand, the rising cost and complexities of health insurance make comprehensive coverage difficult. Group insurance plans can offer a solution . . . if you know what you're getting into.
Group health insurance is insurance written on a specific group of people under a master policy issued to their employer by the insurer. As a small business owner, group insurance is capable of covering your entire labor force under a single policy. If you choose a group plan, you will have a lot of options at your disposal. Your financial responsibility can be reduced by requiring employees to pay a certain percentage of the insurance premiums or by increasing the amount of their co-pay.
However, there are a variety of restrictions, limitations, and conditions that come with group insurance. Here are just a few of the things you will need to consider before you select a group policy for your business.
Before you can obtain group insurance coverage, the insurer will require a certain amount of information. The information you are required to provide usually doesn't include detailed health information about each employee. But you should be prepared to provide a list of employees containing birthdates, gender, and spouse & dependent coverage information, The insurer will probably also request basic information about the business itself so be prepared to answer any questions that arise.
Scope of Coverage
The benefit of group coverage is that it insures all of your employees. But what if some of your employees are already insured under a spouse's insurance plan? Or what if you want to offer individual plans for your employees? Can you do that? The answer to these questions are not as clearcut as you may think. Some group policies make provisions for employees who are insured under other plans while others require all employees to be covered under the group policy. Similarly, you could provide individual plans for your employees, but it is more difficult to accomplish and premium payments could be considered taxable income to the employees.
Workers' Compensation Insurance
It is tempting to buy into the idea that a group policy eliminates the need for workers' compensation insurance. After all, since a group policy covers employee medical expenses, isn't workers' compensation insurance an unnecessary redundancy? Unfortunately, it doesn't work that way. Most states require employers to provide workers' compensation insurance while group health insurance is an optional coverage. And interestingly enough, most group policies exclude coverage for work-related injuries that are typically covered by workers' compensation.
Additional Insurance Coverage
Group health insurance usually only covers basic medical expenses. The plan can be amended to include a wide range of additional coverages including life, disability, dental, medical reimbursement, and vision insurance. Each additional coverage increases your premium, so before you select extras involve your employees in the process to determine the types of coverage that will be most beneficial.