Understanding Requirements and Premium Rates for Small Group Health Insurance
Generally, businesses are categorized into two major types, a small company or a large company. A company reaching 50 full-time employees or equivalent, or has more than this number is legally a large business. On the other hand, a business having less than 50 full-time employees is then considered as small business. That being said, laws governing different types of businesses also differ quite a bit when it comes to health insurance. The objective of this article to provide some learning to workers or employees regarding small group health insurance that is very important to them.
Learn about Coverage Requirements
Based on laws, small employers are not obliged to provide group health insurance coverage to their employees. However, there are important business needs or factors that most small employers have given a lot of consideration. These are employee retention, especially when keeping best workers and attracting new talents for the business, reasons why small group health insurance are being provided by the employers. Meanwhile, there are some cases that federal and state laws may apply to small employers. However, there are factors that still need to be considered such as number of employees and the type of business and if the coverage is being provided through an insurance company. But because of the implementation of the Affordable Care Act (ACA), certain level of requirements has to be included in a small group health insurance plans. ACA has set different benchmarks to ensure that employees get the right amount of benefits.
“Metal tiers” or the different levels of benefits are basically based on the plan pays of the average total medical expenses.
- Platinum plans: These are the best ones, but also the most expensive. They usually cover as much as around 90% of medical expenses
- Gold plans: These plans cover 80% of medical expenses
- Silver plans: A silver plan would usually cover around 70% of medical expenses
- Bronze plans: These are the most affordable ones and offer the least benefits, paying just around 60% of medical expenses
Please take note that the levels mentioned above reflect the average medical expenses they may cover. It isn’t the same as coinsurance, which requires an individual to pay a certain percentage of the overall medical expenses. There are also several other requirements when it comes to group insurance coverage, based on laws that are covered under the ERISA, HIPAA and other such acts.
Determination of the Premium Rates
Presenting of ACA affects how premium rates are being determined in different ways that they used to be. They are mainly based on the modified community rating that takes limited factors into consideration for coming up with the premium rates. These factors are age, geography and the life style or health status of an employee. For an instance, the rate of a 50-year old male employee happens to be a chain smoker and suffers from cancer would likely be higher due to his major health condition. However, a 30-year old healthy male employee with diabetes would still get the same high insurance coverage rate.
Depending on the state where you reside, as an employee, your employer may allow you to choose your insurance company. Moreover, they may also be able to offer you different plan options within a particular metal tiers or different levels.
