Group Health Insurance is the most crucial part of a benefits package for obtaining and retaining the kind of employees you are relying on to help grow your business. It is no secret that in our current environment, it has become a challenge for small employers to maintain affordable health coverage for their employees due to ever increasing costs.
In order to be considered for group health coverage, a carrier will require that there be a minimum of two employees. The eligible employee is one who works on a full time basis with a normal work week of 25 or more hours for compensation. Each year an employer should verify that his group still meets the eligibility requirements for group coverage. A health insurance carrier reviews the application for compliance when a group starts a new plan, and may audit each year at renewal by requesting a certification form verified with a WR-30.
The following items are also necessary for compliance:
Office Visit Co-Payment: Employee payment for office visits (Options from $5-$50)
Deductibles: An amount that may be deducted by the insurance carrier from the total that they will pay toward hospital and other services, in-network and/or out-of-network (Options from $500-$2500)
Network of Participating Physicians: Doctors who are contracted with the plan
RX Coverage: Coverage for prescribed medications. Many plans include 50 % coverage. Tiered RX plans may be available for Generic/Name Brand/Non-Formulary Drugs (i.e. $10/25/50)
Guaranteed Issue: In Maryland, no one can be declined due to a pre-existing condition. They may however, be subject to a pre-existing condition exclusion for six months if they have had a lapse in coverage of over two months.
COBRA (Consolidate Omnibus Budget Reconciliation Act of 1985) requires businesses to extend their group health insurance coverage to an employee who leaves or is terminated for reasons other than cause. The employee must pay the premium to the employer, who in turn includes it with his monthly payment to the company.
In Maryland, companies with two to nineteen employees must continue to provide coverage for twelve months after termination. The coverage must also be offered to the employee’s spouse and child. All potential beneficiaries must apply for continued coverage within 30 days of termination.
An employer must offer coverage to all eligible employees. Where the employer pays 100%, all employees must enroll unless they sign a waiver that they have other coverage. In plans where employees are asked to contribute, employees may waive coverage if they have other coverage or cannot afford coverage. However, if more than 25 % of the group declines coverage without other health insurance elsewhere, it will make the entire group ineligible as the group is not in compliance.
Today, more than ever before, employers need to understand the requirements in offering a group plan. Health insurance is becoming more complicated every day. At Atlantic/Smith, Cropper & Deeley, we are committed to educating employers and helping you to streamline your plans during these difficult economic times.