According to the law, a business having less than 50 full time employees is considered as a small company. On the other hand, businesses with more than 50 full time employees would be considered a large employers in accordance to law. Being said, the laws governing health insurance policies on these two different businesses level have quite differences. In this article, we will be discussing topics regarding small group health insurance that is very important to both employees and small business employers. This will guide us how to understand insurance policies and its premium rates.
Understanding the Coverage Requirements
Generally, if we are talking about the benefits required by the law either state or federal law, small businesses are not obliged to provide health insurance coverage to their employees. However, there are some factors that may affect the implementation of the law depending on the number of employees, the nature of the business and whether the coverage is being provided through an insurance company. In spite of these facts, many small business employers nowadays sees how important this benefit to them and to their employees and the major reasons of acquiring insurance policies is to attract new talents and to retain their best employees in their company.
Another factor that may affect in implementing laws on employees’ benefits in a company particularly regarding health insurance policy is the Affordable Care Act (ACA). Affordable Care Act requires that the small group health insurance policies must meet certain requirements. This act set a different benchmark to ensure that the employees get certain level of benefit.
The different levels or “metal tiers” of benefits are simply based on what the plan pays of the average total medical expenses.
- Platinum plans: These are the best ones, but also the most expensive. They usually cover as much as around 90% of medical expenses
- Gold plans: These plans cover 80% of medical expenses
- Silver plans: A silver plan would usually cover around 70% of medical expenses
- Bronze plans: These are the most affordable ones and offer the least benefits, paying just around 60% of medical expenses
Take note that different tiers reflect the average expenses they may cover. This means that insurances require individual to pay a certain percentage of the overall medical expenses.
Determination of the Premium Rates
Employees’ premium rates vary in different ways when the Affordable Care Act was introduced. Rates are defined depending on modified community rating which takes limited factors into consideration to come up with premium rates. However, rates for a 30-year old healthy male employee and a 30-year old male employee with a pre-existing disease such as diabetes would be the same.
After all the factors that affects the premium rates for employees of their health insurance, employee nevertheless can choose the insurance company that they think would provide the best coverage and rate. They may also be able to choose the type of tier they will provide to their employees since options would be always available to offer by the insurance provider.