The short answer is "one." You only need one employee to qualify for group health insurance! Businesses with one employee, such as a sole proprietor or single-member LLC, can obtain a group health insurance policy through a MEWA. Providing health insurance for employees goes a long way towards building the level of loyalty that reduces turnover. As an owner of a business or a manager in the human resources department, the question is not whether to offer health insurance. Instead, the question is what type of health insurance to offer your staff or team of employees. The answer to your question is called group health insurance. Now, you have to discover what type of health insurance plan do you provide your employees? A licensed and highly-rated health insurance consultant can guide you towards the goal of obtaining group health insurance. What Is Group Health Insurance? Standard group health insurance plans give employees or members of non-profit organizations health insurance coverage. Policyholders enjoy lower premiums than the premiums paid for other types of health insurance policies because the insurance company’s financial risk spreads over a much larger base of enrollees. Individuals are not allowed to purchase group health insurance plans. It requires a certain number of employees to qualify for enrolling a group into a health insurance plan. Group plans typically require a minimum of 50% of employees enrolled to be recognized as a valid business for group health insurance. Differences in group plans mean no two plans are alike. Here are some of the factors that lead to plan differences:
· Insurer guidelines · Types of plans · Costs · Terms · Conditions Referring to the statistics gathered for the most recent year of 2019, the cost of health insurance in a group plan for family coverage was $20, 576. Employees on average contributed almost one-third of the cost at $6,103. Data collected from the Department of Labor demonstrated that in 2019, 92 percent of Americans had some form of health insurance coverage at some point during the year. Popular Types of Group Health Insurance Although health insurance represents the most coveted employee benefit, not every health insurance plan works in the same way. For example, employers have several options when it comes to selecting a group health insurance plan. Let’s review the most common types of group health insurance plans that employers offer their employees. MEWA Health Plans A MEWA allows multiple employers to band together to leverage purchasing power as a group. Although numerous employers participate in MEWA health insurance programs as a whole, employers still have flexibility. They can choose plans that fit their individual needs. Businesses with 1-50 employees (including sole proprietors and self-employed individuals) can join MEWA’s. There are no business industry restrictions to join a MEWA. However, there can be certain minimal tax requirements to participate in a MEWA. For assistance, reach out to Wilson Insurance Group to find out if your business is eligible. Level Funded Health Plans As a combination of a self-funded and a fully-funded plan, a level-funded health plan operates in a very similar way as other group health insurance plans. These plans are essentially a hybrid between self-funded and fully-insured plans. Unlike traditional self-funded plans, level-funded plans have a fixed monthly premium (hence the name “level-funded”). Level funded plans are great health insurance options for businesses with 2-49 employees. This article helps explain more specific details regarding level funded health insurance. Affordable Care Act (ACA) Plans Also referred to as Obamacare, the Affordable Care Act (ACA) is perhaps the most recognized type of group health insurance plan (although it shouldn't be). It is typically far more expensive and less rich in benefits than MEWA or level funded health plans. The United States government is the source of the ACA health insurance plans. Rates are based solely on ages of members enrolled in coverage. Therefore, premiums are usually extremely high. If your business currently has a group ACA plan, let us know immediately. There is a good chance you are paying way too much for your health insurance. COBRA Enacted by the United States Congress, the Consolidated Omnibus Budget Reconciliation Act (COBRA) ensures employees have an option to purchase health insurance while they are between jobs. Businesses that offer group health insurance and have 20 or more employees are required to offer COBRA to terminated employees. Considered a transitional type of group health insurance, COBRA typically allows former employees to enroll in coverage for up to 18 months. The plan gives employees the right to purchase health insurance from their former employer as continued coverage between jobs. If all the options for group health insurance seem overwhelming, the Ohio-licensed insurance brokers at Wilson Insurance Group can guide you through the buying process. Health Cost Sharing A health cost sharing network operates in a similar manner as a MEWA plan. The most significant difference between the two group health insurance plans is how employers get together to enjoy the financial benefits of increased purchasing power. Unlike a MEWA plan that requires employers to organize a coalition of group health insurance buyers, a health cost sharing network handles the recruitment of employers into the network. Number of Employees Needed to Qualify for Group Health Insurance Small businesses qualify for small business health insurance if they have 1-50 employees. For companies that employ more than 50 workers, there are three criteria to meet before meeting the eligibility requirements for group health insurance. · Meet the minimum standards required to purchase group health insurance · Exceed the minimum standards for group coverage reporting requirements · Following every step in the application process In Ohio, both Medical Mutual and Anthem provide group health insurance for businesses all the way down to 1 employee. However, most health insurance carriers want at least two employees to sign up for a group health insurance plan. Typically, at least one of the two employees must demonstrate the reception of a W-2 form, as well as present evidence of employment. Some insurance companies ask for job descriptions for independent contractors. Under the ACA, employers that have more than 50 employers must report that the companies provide health insurance for their employees. Definition of an Employee According to the ACA, employers need at least one employee besides the owner of the business to qualify for small business group health insurance. The one employee must work as a full-time or a full-time equivalent employee. · Full-time employees work a minimum of 30 hours per week · Full-time equivalent employees consist of any combination of employees that work at least 30 hours a week For example, two employees that work part-time at 15 hours per week are considered by the ACA to be one full-time equivalent employee because of the combined 30 hours worked. What Are the Main Benefits? Both employees and employers benefit from group health insurance. The most important benefit might be the affordability of the plan. Lower Costs More employees in the risk pool typically means lower premiums for each employee. More employees spread the risk, which also is a financial benefit for employers. Group health insurance plans deliver plenty of value that includes the following:
· Extensive coverage & broad networks · An increase in health care options · Coverage for pre-existing conditions · Lower individual policy premium · Higher-quality health insurance Tax Breaks for Employers In addition to lower policy costs, employers also benefit from tax incentives because they offer health insurance to their employees. Qualified companies receive a credit on their taxes, which provides them with partial compensation for buying health insurance for their employees. Many employers roll over the tax savings generated from providing group health insurance into other company health and wellness initiatives. For example, some companies upgrade on-site health facilities with extra cash earned in tax incentives. Improve Health Care Access Employees that enroll in a group health insurance program tend to receive better health care services. Most group health insurance plans include preventive services that consist of the implementation of diet regimens and education that enhance the health of employees. Furthermore, employees are not restricted limited/narrow health care provider options. Group health insurance plans have broad, extensive networks. Higher Employee Retention Rate This is another result of group health insurance that benefits both employees and employers. Employees benefit from receiving high-quality, employer-sponsored health insurance that gives them a tremendous morale booster. Happier, more motivated employees produce a higher employee retention rate. Recruiting and developing new employees is a significant cost for any business. Retaining more employees saves your business money. Here’s what a group health insurance plan can do for your employees: · Increased appreciation · More likely to build a career with the company · Feel valued · Better connected with the company mission · Dedicated to making the company stronger Who to Talk to Explore it? Working with an Ohio-licensed benefits consultant represents the most effective strategy to find the right group health insurance plan for your company or organization. Instead of you conducting the research and vetting prospective insurers, a benefits consultant does all the work for you. You gain access to many more health insurance options, as well as spend more time doing what you do best: Taking care of your clients or customers. Some insurance agencies can access hundreds of health insurance companies to find the right plan for your employees. Here are some of the perks you can expect to receive because you decided to work with an Ohio-licensed insurance agent: · Free consultation that includes an analysis of the costs that cover your health insurance needs · Work with a highly-rated professional who is there to answer your questions that concern benefits · A locally operated agency that has a thorough understanding of the local health care industry · Timely advice from a professional who stays on top of the latest insurance industry developments Helping Self-Employed Workers Buy Health insurance Self-employed professionals that run small businesses frequently ask one question: Why should I spend money on group health insurance? The answers are similar to what larger employers say are the reasons for them to purchase group health insurance. Group health insurance for the self-employed is affordable for both the owner and employees · Reduction in sick leaves and workers compensation claims · Higher quality of life · Competitive recruiting advantage What are the factors a self-employed entrepreneur should consider before buying group health insurance? · Number of employees · Type of benefits · Quality of customer service provided by the insurer · Cost of premiums · Ability to customize plans Conclusion How many employees do you need to qualify for group health insurance should be the first question you ask when you shop around for health insurance. Companies that employ between 1-50 workers are eligible for small business insurance, while businesses that have 51 or more employees qualify for large business group health insurance. Group health insurance for companies of all sizes makes sense for several reasons. At the top of the list are the financial benefits enjoyed by workers and employers. Both employers and workers pay less in monthly premiums because of the purchasing power of many employees. Employers receive tax incentives by offering group health insurance that reduces the financial burden of purchasing health insurance. Learn more about group health insurance by contacting the Ohio-licensed agents at Wilson Insurance Group. You can reach us by phone or submit the short online form to schedule a free initial consultation.