Group health insurance is mandated for every company that has over 50 full-time employees. This mandate helps each person working for that company be insured under current health care law. These group insurance plans, which can be purchased from different carriers in Ohio, can be fully-funded, self-funded, limited benefit or minimum essential coverage.
All of these funding options offer different types of coverage in different combinations, at varying costs to the employer. So how should you plan and prepare for the costs of Ohio group health insurance?
To start, you should understand what you need to pay. Group insurance plans apply to full-time employees, which are those who work more than 30 hours per week or 120 hours per month. A group insurance plan must have a “minimum value,” meaning that it must pay at least 60% of the cost of services for the employee. But, it also has to be affordable, so employees should not spend more than 9.5% of their household income to cover the cost of insurance.
It’s essential that the group insurance plan you offer meets these criteria because failing to do so will result in a tax penalty of $2,000 per employee (for any number over 30 employees). Also, a $3,000 penalty will apply to all full-time employees who end up purchasing individual coverage. This extra fee occurs because the plan offered by the employer wasn’t of minimum value or affordable.
Beyond these requirements, you can choose if you want to offer more expansive insurance for your employees. These options can include extra products like dental, vision, life insurance, disability, Medicare and long-term care insurance plans. These can reduce costs for employees overall, but there typically needs to be a minimum number of participants for the insurance policy to apply.
You also might expect to buy a Medicare Supplement insurance policy for your employees who are over 65. This is because group Medicare rates can reduce healthcare costs overall. It’s also easy to do because you can use list billing to deduct part of the premium from your employees’ wages if you don’t want to pay the full Medicare coverage. Buying at group rates helps to lower expenditures on employee benefits for your company. But, you will have to set up an exchange for your employees to shop for coverage as most policies are still sold for individuals, not groups.
Are you looking for ways to save costs? The first step is to shop around. You’ll want to consider the different providers that offer group health insurance packages, and compare the prices and benefits of each. These providers include Aetna, Anthem Blue Cross Blue Shield, Humana, Medical Mutual of Ohio, United Healthcare and others. Overall, it’s worth taking a look at how each package sizes up to the others.
Next, consider what kind of policies you would like to offer — whether that means HSA, HRA or traditional medical coverage. You should also decide whether you would like to include life, dental or vision coverage in the plan, or as a voluntary benefits package. Then, work on getting a quote. You should understand what the charges would be for each option and how much your company would be required to pay for that particular type of insurance.
There are several other ways that you can reduce costs or find the least expensive way of doing things. If all you want to do is avoid paying the penalty for not offering health insurance to your employees, then you can provide them with a Minimum Essential Coverage (MEC) plan. A MEC covers just enough to satisfy the requirements of the Affordable Care Act and typically costs less than $50 per month per employee. However, the group will have to pay the entire premium, and not just half, as in some other plans like fully-funded or major medical plans.
You can also opt for self-funded plans, which offer less extensive coverage meant for younger, healthier employees who likely won’t need the more all-encompassing coverage you can find for a higher cost. If their yearly claim is lower than expected, some groups may even get their premium returned.
It’s vital to consider which of the above policies best meets the needs of your employees. For example, if you have many older employees, the self-funded plans may not cover all of their healthcare expenses. As such, they may need extra coverage like Medicare Supplement plans.
Also, think about how much you want to pay as an employer and what would benefit you the most — whether it’s offering minimum coverage or full benefits.
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Category: Group Health Insurance