Business Insurance Solutions

Business health insurance options may include fully insured/guaranteed issue plans (no medical questions), underwritten/level funded plans (medical questionnaires are required to determine premiums), and association plans (created for groups of employers, such as Chamber of Commerce or Farm Bureau plans). Another option is an Individual Coverage Healthcare Reimbursement Arrangement (ICHRA) plan, which allows employees to select their own carrier and plan from the individual marketplace while the employer provides a contribution toward the plan premium and collects the employee’s portion from their paycheck. Supplemental plans can round out employer benefits with dental, vision, life and accident, cancer protection, and/or critical illness overage. Your available options will be determined by the size of your group, the percentage of eligible employees who will participate in the plan, and the relationship of those participating. (Some carriers will not cover a group that consists of only a husband and wife.)

New hires can be enrolled in your group plan when they start work, but the date
their coverage starts depends on the benefit waiting period that you selected
when setting up your plan (typically the first of the month after 30 or 60 days, or
at most 90 days after the date of hire). Existing employees who have waived
coverage cannot enroll outside of the annual open enrollment period unless they
have a Qualifying Life Event (QLE) that entitles them to a Special Enrollment
Period (SEP). The most common QLE is the loss of coverage elsewhere, such
as due to divorce, a spouse’s job loss, or aging off a parent’s insurance. All SEPs
are time limited; the employee must typically enroll within 30-60 days of the event, depending on the carrier.

In most plans, you must pay 100% of your healthcare costs until the total amount
paid equals your annual deductible. Exclusions typically include preventive
services that are fully covered by the insurance company and services that have
a fixed dollar copay (such as doctor’s office visits) where you only pay the copay
amount. After you have met your deductible, you will continue to pay for any
copay services, while the remaining services have a required coinsurance payment (often 20%). You will pay your percentage of the cost of those services
and the insurance company will cover the remainder of the cost until you meet
your out-of-pocket maximum. (The amounts paid toward your deductible also
count toward the annual out-of-pocket maximum.) Once you meet the out-of-
pocket maximum, the insurance company pays 100% of all covered medical
expenses for the rest of the year.

With a traditional group medical insurance plan, the employer must contribute a
minimum of 50% of the employee-only premium amount for each enrolled
employee, with the employee paying the remainder through a payroll deduction.
The employer is not required to contribute anything towards the premiums for
dependents, or towards premiums for supplemental insurance like dental and
vision. Employers may contribute more than 50% of the employee-only minimum
and/or any amount toward supplemental insurance, if they want to.

A fully insured plan does not require employees to complete detailed medical
questionnaires to determine the monthly premiums. Rates are instead
determined by age, location, family size, and plan type. An underwritten plan
(also referred to as a level funded or self-insured plan) requires employees to
complete medical questionnaires. Employee medical histories are a major factor
in determining the monthly premiums. If your employees are young and/or
relatively healthy, the premiums may be substantially lower with an underwritten
plan. Conversely, if your employees tend to have substantial medical issues, you
may get somewhat lower rates with a fully insured plan. (Older employees will
still get increased rates with a fully insured plan since age is a major factor, but
premiums may be a bit lower than with the underwritten plan if their medical
histories are problematic.)