How to Start Group Health Insurance for a Small Business
Group workplace health insurance remains the backbone of medical insurance coverage in the United States. According to a survey by the Kaiser Family Foundation, more than 157 million Americans get their health insurance through a workplace group plan, as of 2010. Generally, the employer must cover at least half of the total insurance premium. From the small-business employer's perspective, a good health plan can be invaluable in recruiting and retaining a quality staff.
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Instructions
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Make a census. For the purposes of health insurance coverage, a census is a listing of all employees by age and sex, along with the age and sex of their family members who plan to apply for coverage. Have this list handy when you speak to an insurance agent. This census should contain the same employees when you report to the state on your UC-2 unemployment insurance listing.
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Contact an insurance broker. This is an agent who represents more than one insurance company. This agent can take your census information and shop it around to a number of different carriers to find the best solution for you.
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Research the basic plans. You can select health maintenance organizations, or HMOs, which generally provide low premiums but provide the fewest options to employees for choosing their own doctors or other practitioners. You can also select an indemnity plan, which allows more freedom but generally charges higher premiums. Many employers offer employees a choice.
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Design a plan that fits your employees' needs and your budget. You can adjust a number of the plan's factors, such as deductibles, which are the out-of-pocket costs that employees must pay before the insurance plan begins to pay benefits. You can also adjust co-insurance, which is the percentage of costs that must come out of pocket for employees once they meet the deductible. Common co-insurance levels are zero, 20 percent and 30 percent. The lower the co-insurance, the richer the plan's benefits are for the insured. But lower co-insurance levels also command higher premiums.
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Enroll employees. Your insurance broker should be willing to conduct the enrollment or work carefully with your human resources staff. The broker will advise your HR employees and your workforce on plan rules and benefits and explain the features to each employee. You will withhold the employees' share of premiums from their paychecks, and the insurance company will send you a list bill each month for insurance premiums.
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