How to Start a Health Insurance Group
Health insurance is almost always less expensive and more comprehensive when purchased by a group as opposed to individually insuring each participant. If your organization is ready to make a group health insurance plan available to its members and employees, knowing the procedure and preparing the required documents in advance will expedite the process and reduce the likelihood of delays. Implementing a group health insurance plan takes considerable time and effort, and it is in your group's best interest to begin researching and evaluating available options several months in advance of your proposed coverage effective date.
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Instructions
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Determine the most appropriate type of policy. Consider the needs of your group and decide what type of health insurance policy provides the most appropriate coverage for everyone. Compare the features and benefits of the different types of available products, and choose the one that provides your entire group with adequate coverage. A Health Maintenance Organization (HMO) requires you to receive treatment from only those physicians and facilities that are part of the HMO. A Preferred Provider Organization (PPO), on the other hand, allows you the freedom to choose from any doctor or any hospital within the network. There is an additional cost for this flexibility that must also be considered.
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Request a marketing kit. Contact the health insurance carriers in your area and ask them to mail you a package with information about the plans your group is considering. The carrier will send you a marketing kit with brochures that describe the features and benefits of the available products. Examine this information to ensure that the product your group has chosen will provide enough coverage for everyone involved.
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Complete the quote request form. The marketing kit will contain a specific form that allows you to request a formal quote from the carrier. Complete the form in as much detail as possible. Health insurance prices are based on the average age of your group, the geography and demographics of those to be insured, and a multitude of other factors. Each carrier places a different weight on these factors, so request quotes for identical coverage from multiple insurance companies.
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Examine the quotes. Once the carriers have returned your quotes, compare them to each other. Consider the total price for your group, and determine which product from what carrier is the most affordable. Discuss the prices for coverage with everyone in the group and decide which product is most appropriately priced. You want the members covered by your group plan to be comfortable with the monthly cost plus any applicable deductible and co-pays.
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Complete the group policy application documents. When your group has decided on a product, fill out the application paperwork that was included with the quotes. Each member of the group will be required to fill out an individual enrollment form, and the group's owner or decision-maker will be required to complete additional documents and provide information related to the organization.
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Return the completed forms. Once all members of your group have filled out and signed their enrollment forms, mail these documents to the health insurance carrier along with your organization's articles of incorporation, most recent quarterly payroll report, tax documents and initial premium check. These additional materials are required by the carrier to verify your group is a legitimate entity that employs the people applying for coverage. Payment is required prior to activating your new group health insurance policy. Most carriers insist that all new applications and related material are provided no less than two weeks before your group's requested effective date, or you risk new coverage being postponed until the following month.
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Tips & Warnings
Seek the assistance of an independent health insurance broker. A broker will be extremely beneficial when evaluating different carriers, and even more valuable when comparing different types of group health insurance plans. The broker's function is to act as liaison between your group and the insurance carrier, making sure your paperwork is processed properly and efficiently. In most cases, there is no additional cost to your group for enlisting the services of a broker because his compensation is already built in to the policy premiums.
Most states have participation requirements that must be met by your organization in order to be deemed eligible to enroll in a group health insurance plan. This means a certain number of people within the group must participate in the new plan. If too many decline coverage, the entire group will be prohibited from purchasing a policy. Check with your state's insurance department to find out the participation requirements and specific eligibility criteria for your location.
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