Frequently Asked Questions - Small Business Health Insurance
- Can I contact someone if I need help?
Yes. We believe in providing you with top-quality customer service. Our customer care center is staffed with licensed health insurance agents and knowledgeable representatives, ready to assist you.
Back to Top - How do ZIP codes affect group health insurance rates?
Since the cost of medical care varies from area to area, health insurance rates also vary from area to area. This variance is due to the general cost level of the area, differences in medical practices, the degree of specialization of services and the amount of competition in the area. Most small group plans vary rates by ZIP code. The employer's business address is normally used to determine rates.
Back to Top - What is "term life insurance?"
Term life insurance is sometimes offered as a benefit rider available when you buy a group health insurance plan.
Term life insurance is a type of life insurance that has become very popular in recent years. Term life insurance provides protection for a specific period of time, typically 5, 10, 15, 20, 25 or 30 years (this is called the coverage term). The person to be insured selects the coverage term, and a death benefit is paid to the beneficiary if the insured dies within the specified period. Term life insurance works well for people who need coverage for a specific period of time; for example, when a child is born a parent may take out a 20 or 25-year term life policy to ensure that in the event of their death, the child will be provided for through his or her college years.
Back to Top - What is a "Risk Adjustment Factor (RAF)?"
Small group health insurance companies use a Risk Adjustment Factor (RAF) to assess and issue a group's monthly insurance premium. In California, for example, all small group health insurance companies must establish and publish a Standard Rate with the State of California. Standard Rates have a RAF of 1.00. By California law, a health insurance company is limited to issuing a small group employer (generally 2-50 employees) a rate no more than 10% below (0.90 RAF) or 10% above (1.10 RAF) their Standard Rate. Group size, pre-existing medical conditions and the number of COBRA enrollees may affect a group's RAF in California. Outside of California, RAFs vary by health insurance company. If you have any questions regarding your rate or RAF, please feel free to contact our Customer Care Center Mon - Fri, 6AM-5PM PT at 800-872-1458 or via email.
Back to Top - What are "benefit riders?"
Benefit riders are add-on insurance policies that cover health-related services that are not typically covered by your health insurance plan. Dental services, for example, are not typically covered under a health insurance plan but are available at an additional charge as a benefit rider. Usually, benefit riders are only available when you buy a group health insurance plan. If you are interested in purchasing a dental, vision, life insurance, or chiropractic plan as a separate plan, please contact our Customer Care center at 800-872-1458 or via email.
Back to Top - What is the best health insurance plan for my company?
At HealthCoverageQuotes.com we know it can be confusing and frustrating trying to find the right group health insurance plan for your business. Many people may not understand exactly how health insurance works and may not be familiar with health insurance terminology.
The best way to help yourself decide which plan is best for your business is to understand the health care needs and financial constraints that you and your employees face. To get started, you and your employees should answer these questions:
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How often do you utilize medical services?
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Will you need coverage for benefits such as prescription drugs, chiropractic care or maternity?
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Is coverage for preventive care checkups important to you or are you more concerned about coverage in case of a major injury or illness?
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What kind of monthly premium can you afford?
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What kind of deductible, if any, are you willing to pay on an annual basis before your coverage begins?
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Is it important to you to be able to see any doctor you want to, or are you willing to work within a provider network or through a primary care physician?
Once you have an understanding of your health care needs and your financial constraints, you'll be more prepared to examine the benefits and costs of the plans offered in your area. For example, you may want to avoid a health insurance plan that offers benefits that you and your employees never use since these unnecessary benefits may translate into higher premiums. If you're looking at a health insurance plan that requires you to use the insurance company's network of doctors and hospitals, you may want to make sure that your current doctor --if you have one-- is on the list and that network facilities are located near your home or office.
If you're looking for an answer to a specific question, or if you just want some advice to help you narrow down your options, please contact our Customer Care Center. We have licensed professionals available to help you with just this kind of issue. You can reach a Customer Care representative Mon - Fri, 6AM-5PM PT at 800-872-1458. If you prefer, you can also send us an email. Back to Top - What types of group health insurance plans are available?
Group health insurance plans are categorized as either indemnity plans (also known as "traditional indemnity," "fee-for-service," or "FFS" plans) or managed care plans. Indemnity and managed care plans differ in their basic approach. Put broadly, the major differences concern choice of providers, out-of-pocket costs for covered services, and how bills are paid. You will typically have a broader choice of doctors (including specialists, such as cardiologists and surgeons), hospitals, and other health care providers with an indemnity plan while you will typically have less out-of-pocket costs and paperwork with a managed care plan.
Indemnity plans once dominated the American health insurance market, but are no longer as popular as they used to be. They are most common on the east coast. Managed care plans now take up a much larger share of the general health insurance market and are especially dominant in the western parts of the country. There are three basic types of managed care plans: PPOs, HMOs, and POS plans.
Back to Top - How do I know if my company qualifies for group health insurance?
Your company will probably be eligible for a small business plan if it meets the following criteria:
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Your company consists of at least two full-time owners, officers, partners and/or employees, as verified by officially-filed state quarterly wage and tax statements (e.g., NYS-45 in New York and DE-6 in California) or annual federal tax return documents;
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Your company is a legitimate business entity (i.e., your company was formed for a purpose other than to obtain insurance), as verified by one of the following documents:
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A business license or fictitious name filing (proprietorships and partnerships);
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Articles of incorporation (corporations); or
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Articles of organization (limited liability company).
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Your company meets the minimum employer contribution percentage set by the insurance company.
Please note that eligibility criteria may vary among insurance companies and by state. If you have any questions about your company's eligibility for a particular small business plan, please call one of our licensed representatives Mon - Fri, 6AM-5PM PT at 800-872-1458.
Back to Top - Is buying group health insurance tax deductible?
Significant tax advantages may be available to employers who offer group health insurance coverage to their employees. Employers can generally deduct 100% of the health insurance premiums they pay on qualifying group health plans. Providing health insurance coverage to employees as part of a total compensation package may also result in reduced payroll taxes for employers. Additionally, when the employer offers group health coverage, it's possible for an employee's share of the premium to be paid with pre-tax dollars, resulting in tax savings for the employee. Check with your accountant or tax adviser for specific tax benefits for your business and employees.
Back to Top - How are costs typically split between the employer and the employee?
Typically, an employer is required to cover 50% of the employee's monthly premium. In these cases, the employee covers the remainder of his or her own premium and then covers the full premium for any of his or her dependents. Minimum employer contribution levels may differ from state to state and from one insurance company to the next. Also, some employers opt to cover a higher percentage of the employee's monthly premium and sometimes a portion of the premium costs for an employee's dependents.
During the application process, you'll be able to indicate how much of your employees' (and their dependents') monthly premiums you would like to cover.
Back to Top - What are the benefits of providing group health insurance to my employees?
It's no secret that employees value health insurance benefits. Surveys have shown that workers value health insurance coverage second only to monetary compensation. By offering group health insurance benefits to your employees, you may find it easier to hire and retain the best workers for your company.
As a business owner, you may not have health insurance coverage yourself. Perhaps you've considered shopping for an individual health insurance plan for yourself and your family, but did you know that by obtaining insurance through a company, you may get better rates than through the individual market?
Additionally, there are various tax incentives available to you and your employees when you participate in a group health insurance plan. For example, businesses can generally deduct 100% of the premiums they pay on qualifying group health plans and, by offering group health insurance as part of a total compensation package, you may be able to reduce payroll taxes. Plus, your employees can pay their portion of the monthly insurance premium with pre-tax dollars. Make sure that you take these incentives into consideration when determining the affordability of a health insurance plan for you and your employees.
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