Group health insurance is the main kind of employment-based insurance for small businesses. According to the U.S. Census Bureau, sixty percent of Americans receive their insurance as a benefit from their employer. This makes group health insurance the most common type of insurance in the United States.
The Basics of Group Health Insurance
A large percentage of corporations like to offer their employees health insurance. Many have found that the best option for this is to purchase a Group Health Insurance plan. If you are an employer looking into providing insurance to your workers, there are a few things you should know before you begin.
All states have laws regulating how many employees you must have before you are allowed to use group health insurance to cover employees. In all but eleven states, this starts at two employees. In Colorado, Connecticut, Delaware, Florida, Massachusetts, Mississippi, North Carolina, New Hampshire, Rhode Island, Vermont and Washington you only need to have one employee before you qualify for group rates.
There are many things to consider when looking for a policy. It is possible to offer employees different types of policies and let them choose which is best for them. You can also just provide one type of policy that everyone has to accept.
As an employer you are expected to pay most, if not all, of the expenses of your group health plan. Therefore, finding a plan that suits your budget is important.
Health Maintenance Organizations (HMOs) are typically the most inexpensive options for policy types. They tend to be cheaper because they offer subscribers fewer choices in how healthcare is managed. HMOs assign policyholders a primary care physician, responsible for performing basic preventative screenings and making all referral decisions.
Preferred Provider Organizations, or PPOs, tend to be more expensive than HMOs. PPOs offer their policyholders full discretion on which doctors they see. People with PPOs are not required to get referrals to see specialists.
Most employers want to provide their employees with the best medical health insurance, but for small business owners, finances are the biggest consideration. Because of this, some insurance companies have created small business health insurance programs that are more affordable. Any small-business owner looking for insurance should ask about possible discounts.
Business health insurance is one of the fastest growing markets in the insurance industry today. As a result, large insurance companies have begun offering discounts to small-business owners as a way to entice their business. This is a win-win situation for everyone since it enables insurance companies to tap into a previously inaccessible market, and small-business owners to provide their employees with steady benefits.
The Importance of Group Health Insurance
Many business owners have discovered the benefit of providing their employees with health insurance. People want to continue to work for employers that offer great benefits. They will work harder and be more productive to avoid losing their jobs and their great benefits.
High employee turnover is a time consuming problem. Every time a new employee is hired you have to train them. This process can take weeks, often leading to a loss in productivity.
Purchasing a group health policy also gives employers the opportunity to have health insurance for themselves. Business owners generally have difficulty spending money on themselves when they feel it could go to their business instead. However, you can’t run a business if you are not healthy. Providing yourself and your employees with insurance will ultimately benefit the entire company.
Group Health Insurance Plans Versus Individual Health Insurance
Group health insurance is the most common type of business health insurance. There has to be a reason so many business owners are drawn to this particular type of insurance.
Group rates are much cheaper than individual rates, per person. This makes it feasible to provide coverage for large groups of people. Even small businesses can afford to buy insurance policies for their employees at these cheaper rates.
Some employees feel that group health plans do not provide them with enough options. For people who need more of a say, individual health insurance can still be an option. For most people though, the group policy offered by their employer will be their only opportunity to insure themselves and their family.
Inspiring loyalty in your employees is very important when building a company. Offering employees medical health insurance is a good way to motivate them to want to work hard and stay with you for a long time.