Frequently Asked Questions About Group Health Insurance:

It can be difficult for small business owners, particularly if they are new business owners, to find out what types of group health insurance options are available to them. Since you are required by law to offer a group health plan if you have more than 2 employees, it is very important to understand how group coverage works and what you will need to do to get a policy started.

We have collected some of the most commonly asked questions about group health insurance for small business owners.

1. What kinds of policies are available under group health insurance? There are three main types of policies that are available under a group health insurance plan. They are an HMO or Managed Care policy, a PPO or preferred provider organization and a POS, or point of service plan. Each one has good points and drawbacks, and it is important to understand what type of plan your employees are looking for before you decide. HMO's frequently offer lower deductibles and co-payments, but they are usually not eligible for health savings accounts. As these accounts become more popular, this has been a concern for many group insurance policyholders.

2. What is a health savings account? A health savings account or HSA is a new plan introduced by Congress in 2004. It allows employees to make contributions to an account, earn interest and make payments for qualified medical expenses, including health care premiums, tax-free.

3. What types of group health insurance plans are HSA eligible? In order for a plan to be HSA eligible, it cannot offer a co-pay and the yearly deductible must be greater than $1000.

4. Do I have to offer group health insurance for all of my employees? Yes, you must offer the same options to all of your employees, regardless of when they joined your company. This will help you avoid discrimination claims, which are much more costly than added premiums for special benefits for all of your employees.

5. What are benefit riders? A benefit rider is an add-on to an insurance policy. It allows further customization of a health plan to suit individual needs, and affords a greater level of coverage for the policyholder. For example, a dental benefit rider would add on dental care coverage to an existing health insurance policy.

6. Can my zip code affect my group health rates? Yes, the location of your company may affect how much you will pay for your group health insurance premiums. This is due to many factors, such as location of provider networks and risk management. If you have several locations for your company, each location may have a different premium rate.

7. How do I find the best deal on a group health insurance plan? The most important step you will take in obtaining a group health policy is comparison shopping. Do not settle for the first plan you find. Take some time to see what your options are and check with several different insurance companies before making you final decision.

8. Should I consult my employees before switching or adding a group health plan? This is up to you, but it is considerate to consult with your employees before suddenly switching a group health insurance plan. You will need to consider lag-times before benefits become active, and how different rates may affect your employees. Not all insurance policies are one size fits all and your employees may not be able to afford the coverage that you are offering. Try to find a plan that will appeal to the majority of your employees so that everyone can enjoy health care coverage.

9. What is HIPPA? HIPPA stands for the Health Insurance Portability and Accountability Act. This act is in place to set up privacy guards for employee's health records. There are new standards for sharing of health insurance information and it is important to make sure that your company is in compliance. If you are unsure of what this means for your company, you should check with your insurance representative for more information.

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