What is Group Health Insurance?
Group Health Insurance is a type of health insurance plan offered by an employer to members of their organization. Many employees under their employer’s group health insurance plan receive coverage at a lower cost, as the price for the insurer is distributed across multiple members.
The Affordable Care Act requires businesses with over 50 full-time employees to provide health insurance to at least 95% of their full-time workers. Health plan benefits vary from state to state, so employers should research their area’s costs, participation rates, and more to choose the right plan for their organization.
What Factors Should I Consider When Finding Group Health Insurance?
There are many factors to consider when finding the right group health insurance for your staff. To ensure your employees receive the right benefits, we’ve compiled a list of essential things to look for in a group health insurance plan.
Coverage
Group health insurance plans typically offer a standard set of benefits, including inpatient treatments, hospitalization costs, daycare, ambulance bills, etc. When choosing a group health insurance plan for your employees, it’s essential to evaluate the plan’s scope of coverage. Depending on your staff’s average age and medical history, you may want to ensure your team receives all-around protection, especially for medical emergencies.
Sum Insured
The sum insured is the amount an insurance company pays a policyholder in the case of an unforeseen event. Insurance companies typically set a maximum limit of the sum insured and allow policyholders to choose an amount within the designated limit. As an employer, you should aim for the highest possible coverage while remaining within your budget. An optimal sum insured will provide your staff with adequate coverage and combat high medical costs.
Members Covered
Many group health insurance plans extend coverage to the employee’s family members. Employers should consider the coverage extension when choosing a plan, particularly if their employees have dependent children, spouses, or parents that would benefit from coverage.
Premium Costs
An insurance premium is the amount of money paid for monthly health insurance. For group health insurance coverage, premiums are calculated for each employee enrolled in the plan, with an additional cost for any dependents. Each individual’s premium is then collected to get the group’s total premium.
Premiums will differ depending on the insurance company. Before selecting a plan for their organization, employers should compare premium quotes to get the best bang fortheir buck. However, comparing premiums based on the policy coverage is essential, as cheaper premiums might indicate a narrower scope of benefits.
How Much Does Group Health Insurance Cost For Employers and Employees?
Although medical coverage can be expensive, establishing a group health insurance plan is a necessary investment for a successful business. Expenses for employers will vary based on several factors, including the insurance carrier, type of plan, location, employee demographics, and more.
When budgeting for group health insurance, employers should keep their expenses within 10-20% of their annual revenue. They should then aim to keep their employee premiums as low as possible. A good rule of thumb is to keep employees’ annual premium costs around 10% of their income.
MonsterQuoter makes finding group health insurance easy. By using our tools to compare and buy group insurance plans, you’ll be able to invest in your business’ success without breaking the bank. Connect with our strategists to start shopping quotes today!
