Group Insurance Benefits ExplainedGet the details, guidelines, pros and cons, and future outlook of Group Insurance Benefits from the specialists

Professional Management Tips : Why Are Employee Benefits So Important?

I agree that employee benefits are important and that by offering a good employee benefit package an employee can get and keep good employees. I was a little startled by the assertion that today’s employees have a weaker work ethic than in the past – do you think that is true?

P.S. Do you have any questions about your employee benefit plans? Contact Nelson Shear at Nico Insurance Services to get your questions answered.

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California large group health insurance information from the NAHU (National Association of Health Underwriters).

Large Employer Groups

In California, a small employer group has more than 51 employees. Outlined below are the general guidelines for large employer health plans.

The information herein includes the definition, the issuance of coverage guidelines, and the creditable coverage requirements.

Definition

51 or more employees.

Issuance of Coverage

Large group health insurance contracts, unlike small group health insurance contracts, do not have to be offered on a guarantee-issue basis. Large group health insurance is medically underwritten at the time of purchase, with rates based on employee participation and prior claims experience. However, as per the federal Health Insurance Portability and Accountability Act of 1996, all group insurance contracts, including large group contracts, must be guarantee-renewable, unless there is non-payment of premium, the employer has committed fraud or intentional misrepresentation or the employer has not complied with the terms of the health insurance contract.

Pre-existing Condition Requirements

In California, all group health insurance carriers can impose a 6-month look-back/6-month exclusionary period for preexisting conditions on enrollees that do not have prior creditable coverage
Underwriting Requirements

In the small group market in California, private health insurance carriers can medically underwrite rates. Rates may vary by plus or minus 10 percent of the indexed rate based on the health status of the group.

Creditable Coverage Requirements

As per the federal Health Insurance Portability and Accountability Act of 1996, credit for prior coverage is required as long as there is no more than a 63-day break in coverage.

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California small group health insurance information from the NAHU (National Association of Health Underwriters).

Small Employer Groups

In California, a small employer group has less than 50 employees. Outlined below are the general guidelines for small employer health plans.

The information herein includes the definition, the guarantee issue requirements, the pre-existing condition requirement and the credit towards pre-existing conditions required to be given for an enrollee’s prior coverage, and how the underwriting may be done to determine rates for these policies.

Definition

2-50 employees.

Guarantee Issue Requirements

As per the federal Health Insurance Portability and Accountability Act of 1996, all health insurance contracts for employer-groups of 2-50 employees must be issued on a guarantee-issue basis. All group insurance contracts must also be guarantee-renewable, unless there is non-payment of premium, the employer has committed fraud or intentional misrepresentation or the employer has not complied with the terms of the health insurance contract.

Pre-existing Condition Requirements

In California, all group health insurance carriers can impose a 6-month look-back/6-month exclusionary period for preexisting conditions on enrollees that do not have prior creditable coverage
Underwriting Requirements

In the small group market in California, private health insurance carriers can medically underwrite rates. Rates may vary by plus or minus 10 percent of the indexed rate based on the health status of the group.

Creditable Coverage Requirements

As per the federal Health Insurance Portability and Accountability Act of 1996, credit for prior coverage is required as long as there is no more than a 63-day break in coverage.

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When contemplating whether or not you should get business medical insurance for you and your employees, consider the following 3 reasons to get the coverage.

1. Become an employer of choice

Employee benefits are a huge consideration for potential job seekers. If you offer an employee benefit package, you will attract the top candidates for the position you are hiring for.

Employees find it hard to leave a job that offers good benefits. They will accept less pay with a job that offers medical coverage than to move on to a job that offers more pay but fewer or no benefits.

2. Keep your employees healthy

People who have medical insurance are healthier than those who go without. They tend to engage in preventative health activities and if they do get sick, they turn to a health care practitioner and they recover quicker than those who do not. Employees with health insurance miss less time from work.

3. Business tax breaks

In most cases, employer contributions towards group health insurance premiums are 100% tax deductible.

In the long run, offering your employees business medical insurance is a good investment in your business.

Contact a legitimate, reputable insurance agency who specializes in medical insurance for small business owners to discuss your needs and the group plans available. They will help you choose the right plans at the best cost.

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Voluntary benefits cover expenses not paid for by traditional health insurance. Voluntary benefits include disability, accident, critical illness, cancer and supplemental health insurance and cover expenses such as loss of income, travel to treatment centers, child care and the like in the event of unexpected illness or injury.

With the rising cost of health insurance, voluntary benefits are becoming more popular for both employers and employees.

Voluntary Benefits from the Employer’s Point of View:

• Employers can offer their employees more comprehensive coverage.
• Since voluntary benefits are 100% employee paid, there are no additional costs to the employer.
• The employer’s payroll taxes may be reduced if the employee’s contribution is paid with pre-tax dollars.

Voluntary Benefits from the Employee’s Point of View:

• Employees don’t have to use their savings while recovering from an unexpected illness or accident.
• Benefits are paid directly to the employee when they need them.
• Premiums for the voluntary benefits are based on group rates and so are lower than if the employee purchased the coverage on an individual basis and are typically just a few dollars per month per plan.
• Employees can save on payroll taxes in many cases because the premiums are paid with pre-tax dollars.

Thus, voluntary benefits are a good idea for both employees and employers and is something that you should consider.

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Employer Profiles & Group Insurance Benefits

Recent research has shown that employers fall within four key profile types when it comes to choosing group insurance benefits. The research looked at how benefits are optimized and how each profile type maximized the return on the cost of these benefits.

The data gathered included employer attitude about the benefits they offered and how the costs of these benefits were funded.

Based on the results, the study determined that the four profile types are “Progressive” representing 32% of those polled, “Standard” representing 28% of those polled, “Flexible” representing 23% of those polled and “Traditional” representing 17% of those polled.

So, what are the characteristics of the four profile types?

The “Standard” employer understands the basics of health insurance and retirement plans, but does not believe in fully funding them themselves. They most often offer their employees access to group rates on a voluntary basis. This means that the employees pay the most working for a “Standard” employer.

The “Traditional” employer believes strongly in offering health insurance and retirement plans to their employees and usually funds these core benefits. They may also offer other benefits on a voluntary basis that the employees must pay for themselves, but they do not feel strongly about making available all of the benefits that fit the specific needs of their employees. Even when they do offer any additional voluntary benefits, they do not educate their employees about the details of these “extra” benefits since they lie outside of the basic benefits they believe in.

The “Flexible” employer is more aware of all of the group insurance benefits available. They look at what other companies in their line of business offer their employees so that the packages they offer are competitive. They strive to find a balance between offering choices to their employees and the costs to themselves and the employees. They are much better at explaining the benefits to their employees and helping their employees choose what benefits they want and need.

The “Progressive” employer believes that the richness and diversity of their benefits program provides a competitive advantage over other companies in their line of business. They focus on meeting the needs of their employees, and provide more benefits beyond basic health. They believe in offering benefits and programs that address work/life balance for their employees.

The research shows that the four employer types are not industry specific and not influenced by the size of the company.

It may be time for some employers to reconsider their beliefs about group insurance benefits. Offering a more comprehensive and modern benefit program can benefit the company by enticing better workers in their industry. Also, choosing to cultivate health and well being by implementing programs and benefits that help employees stay well, will ultimately have a positive impact on a company’s bottom line.

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