Group Health - The Benefit Source

The Benefit

Offering your employees, a comprehensive health plan is one step in attracting and retaining good employees. Also, providing group health mitigates the risk of financial hardship should someone need a serious medical procedure. You should be aware that Group health works just like individual health policies except for a few criteria:

Minimum Participation -Group plans require a minimum number of eligible employees to participate in the plan. This number can vary from 50% to 75% of eligible employees depending on the carrier. Most carriers will not hold it against your participation numbers if an employee waives because they are covered by their spouse.

Employer and Employee Contribution – It varies from carrier to carrier, but most carriers require the employer to pay a minimum portion of the costs of the insurance. Typically this amount is 50% for individuals and 25% for families.

Underwriting – For a group plan no one can be denied. In an individual or family plan, a person can be denied based on health underwriting. As of 2014 for a small group plan (2-50 employees) no one can be denied coverage due to health.

The Details

Health Savings Account

HSA plans typically only have a deductible that can range anywhere from $1,500 to $7,900 depending on the plan. This means you will pay 100% of the cost of care and drugs until you hit the deductible, but once you hit it you are done paying for that year. These plans are a great option for people who are healthy and are only looking for coverage in the case of a catastrophic illness. Furthermore, you can contribute into your health savings account with pre-tax dollars, which helps reduce your taxable income. For 2020 the maximum individual contribution into an HSA is $3,550 and for a family it is $7100. Employers can contribute into an employees HSA.

Preferred Provider Organization (PPO) Plan

These are the plans that most people think about when they think of health insurance. These plans typically have a deductible, co-insurance, out of pocket max, and co-pays. These plans are typically very comprehensive and the co-pays are great for a person who has frequent doctor visits or are on a lot of medication, which would make paying 100% of the costs with an HSA too expensive. Furthermore, you have a wide selection of in network doctors to choose from. You also have the choice to use out of network doctors, but the costs are usually higher and the insurance carrier may not pay as much for procedures. The only drawback to a PPO plan is that the plan typically has the highest premiums.

Health Maintenance Organizations (HMO)

These plans typically limit you to using doctors and facilities that are part of the HMO network. Typically these plans include the same components as a PPO plan. In some cases, the premiums of the HMO can be more competitive than that of a PPO plan because of the efficiencies that come with the HMO structure.