There are so many parts and pieces to running a business and keeping both your employees and customers happy. Happier employees will make for happier customers, so why not make sure they stick around? One of the best ways to do that is to have a group health insurance plan.
But what is group health insurance? Keep reading and we’ll help you understand the basics!
Definition of Group Health Insurance
Group health insurance is a health insurance plan that is sponsored by an employer or group. Getting health insurance coverage for a group of people spreads the risk over larger numbers, which in turn lowers the cost for the insurance company. That cost is passed on to the consumer: you as a business and the employees you would be sponsoring.
Several characteristics identify a group health insurance plan:
- A 70% participation rate is often required
- Employees or group members can choose to accept or decline coverage
- Premiums are shared between company and employees, usually at an 80/20 ratio
- Dependents and family members can be added at an additional cost
- There may be multiple tiers available to fit different budgets
- Supplemental health benefits such as dental, vision, and prescription are usually available to be added to the chosen policy.
If this is the type of medical coverage you are looking into, you can safely bet that it is a health insurance plan. It is also helpful to understand the difference between plans set up as an HMO (Health Maintenance Organization) versus PPO (Preferred Provider Organization).
An HMO allows the insured to choose a Primary Care Physician (PCP). They can see this physician whenever they like but they must get a referral from them to go to any other doctor or specialist.
A PPO offers more freedom to the insured as they can choose which doctors to see and go to specialists without referrals.
Benefits to Consider
Hopefully helping you understand what group health insurance is will help you determine whether this is the right fit for you and your company. Choosing how to offer medical coverage in your employee benefits package can determine how enticing working for you would be to potential employees.
With government health care requirements, medical care can be cost-prohibitive, for employees and you as a business. Finding the best health insurance can drive these costs down.
The average annual cost for a member of a group health plan is $7400, with the employer paying 80% and the employee paying 20%. Keep in mind that you as an employer can potentially qualify for tax credits for offering medical benefits to your employees.
Be Confident in Your Knowledge
Setting up health insurance for your company is no small task. Now that you understand the basics you will know what to look for as you research different health insurance companies and policies. You can find the right fit for your company!
For other business tips and helpful information, check out more articles on this site!