Here are some things to consider when implementing a group health insurance plan.
There are not that many red flags when it comes to group health insurance; all health insurance is heavily regulated by the state so there are a few gotcha items. The only one that might apply is a pre-existing limitation which limits coverage for medical conditions that an employee received treatment for prior to coming onto the plan.
If you run into this with any of your employees, there is a way around it. If the employee had medical coverage from another group health insurance plan prior to coming onto your plan, they can request from their former plan a Certificate of Group Health Coverage (CGHC). Under HIPAA (Health Insurance Portability & Accountability Act) if they present a CGHC to your new insurer, and if they met the pre-existing condition limitation on their former plan then they will not have to meet a new one under your new plan.
If you do not plan to pay for 100% of the employee and family premiums, you will want to buy a section 125 premium only plan document (one-time fee of about $300). By having this document all premiums that your employees pay can be deducted from their pay checks on a pre-tax basis. Aside from the employee tax savings, this also lowers their gross taxable salary so you can save money on payroll taxes.
In terms of group insurance health plans ask your broker for quotes from every health/HMO insurance company in your area. I would recommend that you consider either high co pay HMO which will cost $25 to $40 for office visits and a hospitalization co pay as well, or a high deductible health plan.
High deductible health plans (HDHP) are a good option because it allows the employee to have medical coverage for the high end losses and pay for the smaller items themselves. If you do a HDHP I would definitely combine it with a HSA (Heath Savings Account) or HRA (Health Reimbursement Account).
HSA allows the employer to contribute and the employees can contribute on a pre-tax basis to the HSA account (again everyone saves on taxes like they do on the 125 premium plan document). This money can be used to pay for the employees out of pocket expenses as they meet their deductible. The HSA also can be used for other healthcare expenses such as dental, vision and chiropractors. The bank who handles the banking for the HSA will issue a debit visa card for the employees to use to pay for these expenses.
If you have Kaiser in your area, then check to see if they have an HSA. If they do then it is the cheapest deal. From my own experience, I find Kaiser to be the best healthcare model available. Ask for a tour of the Kaiser facility. You will be surprised.
HCP National is not a law firm and does not provide legal advice. We are a group health insurance broker and risk manager.
