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How do I know if my company qualifies for group health insurance?
Your company will probably be eligible for a small business plan if it meets the following criteria:
Your company consists of at least two full-time owners, officers, partners and/or employees, as verified by officially-filed state quarterly wage and tax statements or annual federal tax return documents;
Your company is a legitimate business entity (i.e., your company was formed for a purpose other than to obtain insurance), as verified by one of the following documents:
A business license or fictitious name filing (proprietorships and partnerships);
Articles of incorporation (corporations); or
Articles of organization (limited liability company).
Your company meets the minimum employer contribution percentage set by the insurance company.
Please note that eligibility criteria may vary among insurance companies and by state. If you have any questions about your company's eligibility for a particular small business plan, please call one of our licensed representatives Mon - Fri, 8AM-6PM PT at 1-888-467-8703.
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What is the best health insurance plan for my company?
At Texas Group Insurance we know it can be confusing and frustrating trying to find the right group health insurance plan for your business. Many people may not understand exactly how health insurance works and may not be familiar with health insurance terminology.
The best way to help yourself decide which plan is best for your business is to understand the health care needs and financial constraints that you and your employees face. To get started, you and your employees should answer these questions:
How often do you utilize medical services?
Will you need coverage for benefits such as prescription drugs, chiropractic care or maternity?
Is coverage for preventive care checkups important to you or are you more concerned about coverage in case of a major injury or illness?
What kind of monthly premium can you afford?
What kind of deductible, if any, are you willing to pay on an annual basis before your coverage begins?
Is it important to you to be able to see any doctor you want to, or are you willing to work within a provider network or through a primary care physician?
Once you have an understanding of your health care needs and your financial constraints, you'll be more prepared to examine the benefits and costs of the plans offered in your area. For example, you may want to avoid a health insurance plan that offers benefits that you and your employees never use since these unnecessary benefits may translate into higher premiums. If you're looking at a health insurance plan that requires you to use the insurance company's network of doctors and hospitals, you may want to make sure that your current doctor --if you have one-- is on the list and that network facilities are located near your home or office.
If you're looking for an answer to a specific question, or if you just want some advice to help you narrow down your options, please contact us. We have licensed professionals available to help you with just this kind of issue. You can reach a representative Mon - Fri, 8AM-6PM CT at 1-888-467-8703. If you prefer, you can also send us an email.
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What are the benefits of providing group health insurance to my employees?
It's no secret that employees value health insurance benefits. Surveys have shown that workers value health insurance coverage second only to monetary compensation. By offering group health insurance benefits to your employees, you may find it easier to hire and retain the best workers for your company.
As a business owner, you may not have health insurance coverage yourself. Perhaps you've considered shopping for an individual health insurance plan for yourself and your family, but did you know that by obtaining insurance through a company, you may get better rates than through the individual market?
Additionally, there are various tax incentives available to you and your employees when you participate in a group health insurance plan. For example, businesses can generally deduct 100% of the premiums they pay on qualifying group health plans and, by offering group health insurance as part of a total compensation package, you may be able to reduce payroll taxes. Plus, your employees can pay their portion of the monthly insurance premium with pre-tax dollars. Make sure that you take these incentives into consideration when determining the affordability of a health insurance plan for you and your employees.
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How are costs typically split between the employer and the employee?
Typically, an employer is required to cover 50% of the employee's monthly premium. In these cases, the employee covers the remainder of his or her own premium and then covers the full premium for any of his or her dependants. Minimum employer contribution levels may differ from state to state and from one insurance company to the next. Also, some employers opt to cover a higher percentage of the employee's monthly premium and sometimes a portion of the premium costs for an employee's dependants.
During the application process, you'll be able to indicate how much of your employees' (and their dependents') monthly premiums you would like to cover.
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Is buying group health insurance tax deductible?
Significant tax advantages may be available to employers who offer group health insurance coverage to their employees. Employers can generally deduct 100% of the health insurance premiums they pay on qualifying group health plans. Providing health insurance coverage to employees as part of a total compensation package may also result in reduced payroll taxes for employers. Additionally, when the employer offers group health coverage, it's possible for an employee's share of the premium to be paid with pre-tax dollars, resulting in tax savings for the employee. Check with your accountant or tax advisor for specific tax benefits for your business and employees.
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What types of group health insurance plans are available?
Group health insurance plans are categorized as either indemnity plans (also known as "traditional indemnity," "fee-for-service," or "FFS" plans) or managed care plans. Indemnity and managed care plans differ in their basic approach. Put broadly, the major differences concern choice of providers, out-of-pocket costs for covered services, and how bills are paid. You will typically have a broader choice of doctors (including specialists, such as cardiologists and surgeons), hospitals, and other health care providers with an indemnity plan while you will typically have less out-of-pocket costs and paperwork with a managed care plan.
Indemnity plans once dominated the American health insurance market, but are no longer as popular as they used to be. They are most common on the east coast. Managed care plans now take up a much larger share of the general health insurance market and are especially dominant in the western parts of the country. There are three basic types of managed care plans: PPOs, HMOs, and POS plans.
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How does an Indemnity plan work?
A traditional indemnity plan offers you and your employees substantial freedom in choosing which doctors and hospitals to use, but such plans typically have higher out-of-pocket costs and more paperwork.
Under an indemnity plan, you may see whatever doctors or specialists you like, with no referrals required. Though you may choose to get the majority of your basic care from a single doctor, your insurance company will not require you to choose a primary care physician.
However, this kind of freedom will cost you. You'll likely be required to pay an annual deductible (typically between $500 and $1500) before the insurance company begins to pay your claims. Once your deductible has been met, the insurance company will typically pay your claims at a set percentage of the "usual and customary charge" for the service. The "usual and customary charge" is the amount that healthcare providers in your area typically charge for any given service.
Additionally, an indemnity plan may require that you pay up front for services and then submit a claim to the insurance company for reimbursement.
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How does a PPO Plan work?
As a member of a PPO, or "Preferred Provider Organization," plan, you'll be encouraged to use the insurance company's network of participating doctors and hospitals. These providers have been contracted to provide services to the plan's members at a discounted rate. You won't be required to pick a primary care physician and you will be able to see doctors and specialists within the network at your own discretion.
You will probably have an annual deductible to pay before the insurance company begins paying your claims. Once the deductible is met, you'll be required to make a co-payment for most doctors' office visits. Some plans may also require that you cover a percentage of the total charges.
With a PPO plan, services rendered by an out-of-network physician are typically covered at a lower percentage than services rendered by a network physician. Seeing an out-of-network provider can become costly. For example, if you visit an out-of-network provider for services totaling $500, the PPO plan may cover the charge at only 60% of the amount that a network provider would charge for the same service. If a network doctor would accept $250 as payment in full, this means that the insurance company would pay only $150 and the remaining $350 would come out of your pocket. Additionally, if you see a provider outside of the plan's network, you may have to pay the charges up front and then submit your own claim for reimbursement.
PPO plans offer flexibility in choosing your providers, however, make sure that you familiarize yourself with the plan's provider network before choosing a PPO plan. You may wish to make sure that your favorite doctor or local hospital belongs to the network. If you have children who need to make regular visits to the doctor, be sure that you're aware of the plan's benefits for preventive and well-child care.
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How does an HMO plan work?
As a member of an HMO ("Health Maintenance Organizations"), you'll be required to choose a primary care physician (PCP). Your PCP will take care of most of your health care needs. Before you can see a specialist, you'll need to obtain a referral from your PCP.
With an HMO you'll likely have coverage for a broader range of preventive healthcare services than through any other type of health insurance plan. Additionally, you probably won't have a deductible to pay before services are covered. You also won't have to worry about much if any of the paperwork involved in submitting claims.
However, keep in mind that you'll likely have no coverage whatsoever for services rendered by non-network providers or services rendered without a proper referral from your PCP.
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How does a POS plan work?
A POS, or "Point of Service" plan combines some of the features offered by HMO and PPO plans.
As with an HMO, members of a POS plan are required to choose a primary care physician (PCP) from the plan's network of providers. Services rendered by your PCP are typically not subject to a deductible. Also, like HMOs, POS plans typically offer coverage for preventive care visits.
Typically, however, you will only receive a higher level of coverage for services rendered or referred by your PCP. Services rendered by a non-network provider may be subject to a deductible and will likely only receive partial coverage. If services are rendered outside of the network, you'll likely have to pay up-front and submit a claim to the insurance company yourself.
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What is a Health Savings Account (HSA) and how does it work?
A Health Savings Account (HSA) is a tax-favored savings account that is used in conjunction with an HSA-eligible high-deductible health insurance plan to make healthcare more affordable and to save for retirement. By offering HSA-eligible high-deductible health insurance plans to their employees, employers may be able to reduce their monthly premiums since the premium for these plans are typically lower than a PPO or HMO plan with a lower deductible.
HSAs are similar to IRAs, but even better:
Pre-tax money is deposited each year into an HSA and can be easily withdrawn at any time with no penalty or taxes to pay for qualified medical expenses. Withdrawals can also be made for non-medical purposes, but will be taxed as normal income and are subject to a 10 percent penalty if done prior to age 65.
Any HSA funds not used each year remain in the account, and earn interest tax-free to supplement medical expenses at any time in the future.
Like an IRA, the account belongs to the employee, not the employer. But unlike an IRA, an employer CAN contribute to an HSA.
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What are "benefit riders?"
Benefit riders are add-on insurance policies that cover health-related services that are not typically covered by your health insurance plan. Dental services, for example, are not typically covered under a health insurance plan but are available at an additional charge as a benefit rider. Usually, benefit riders are only available when you buy a group health insurance plan. If you are interested in purchasing a dental, vision, life insurance, or chiropractic plan as a separate plan, please contact us at 1-888-467-8703 or via email.
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What is "term life insurance?"
Term life insurance is sometimes offered as a benefit rider available when you buy a group health insurance plan.
Term life insurance is a type of life insurance that has become very popular in recent years. Term life insurance provides protection for a specific period of time, typically 5, 10, 15, 20, 25 or 30 years (this is called the coverage term). The person to be insured selects the coverage term, and a death benefit is paid to the beneficiary if the insured dies within the specified period. Term life insurance works well for people who need coverage for a specific period of time; for example, when a child is born a parent may take out a 20 or 25-year term life policy to ensure that in the event of their death, the child will be provided for through his or her college years.
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How do ZIP codes affect group health insurance rates?
Since the cost of medical care varies from area to area, health insurance rates also vary from area to area. This variance is due to the general cost level of the area, differences in medical practices, the degree of specialization of services and the amount of competition in the area. Most small group plans vary rates by ZIP code. The employer's business address is normally used to determine rates.
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