Group Health
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 in Illinois to maintain affordable health coverage for their employees due to ever increasing costs.
What you’ll discover in this report:
Eligibility Requirements: The Nuts and Bolts!
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, but employers are allowed to set the minimum requirement higher, ie at 30 or 37 1/2 hours. (NOTE: Under the new healthcare law, the requirement to offer health insurance is set at 30 hours a week.) . 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 verification of full time eligible employees and a copy of the most recent Quarterly UI-3/40 form filed with the state of IL. If an audit occurs and the health insurance carrier sees that participation is not met, they will usually give a 30 day notice to the employer to add additional employees to meet the requirement or the group will be terminated.
The following items are also necessary for compliance:
- At least 75 % of the employees must be employed in Illinois
- Only 25 % can waive coverage without having other coverage elsewhere
- The employer must pay a percentage of the Employee only premium, usually 25-50 % of the premium. They are not required to pay for dependents.
- The employer has the right to decide on a waiting period for new employees to enroll in the plan - 0 to 90 days Illinois. NOTE: Under ACA, the waiting period for Employees cannot exceed 90 days beginning on Jan 1, 2014. A waiting period of "1st of the month following 90 days" will not be allowed because this could exceed the 90 day rule with some months having 31 days.
Type of Group Plans Available
- HMO: This managed Care plan gives your employees the security of lower out-of-pocket expenses, comprehensive coverage and virtually no claim forms to fill out. Employees choose a primary care physician who will manage medical care and refer employees to specialists and hospitals within the network.
- POS: Your employees have the freedom to use the managed care network of physicians or choose doctors and hospitals outside the network. In network, the employees select a primary care physician (PCP) to coordinate their needs and to refer them to in-network specialists. By going out-of-network employees may encounter higher out-of- pocket expense and more paperwork.
- Direct Access: This open access plan provides employees with direct access to all primary care and specialists within the network without a referral. They do not need to select one primary care doctor. While employees have the freedom to choose from doctors and hospitals within the network, they may also go outside the network. By going out- of-network, they will encounter higher out-of-pocket expenses. Employers can choose from various plan designs to meet their budget and benefit needs.
- PPO: This preferred provider organization gives the employees the largest selections of network doctors and hospitals. If the employee uses the network, he receives a higher level of coverage; if he chooses out-of-network physicians or hospitals, he pays a higher share of the cost. Various plan designs are available.
- HSA: A Health Savings Account is like a 401K for healthcare. It is a tax advantaged personal savings or investment account that individuals can use to save and pay for their qualified healthcare expenses, now or in the future. Paired with a qualified high deductible plan, the HSA is a powerful tool that empowers consumers to be more actively involved in their health care decisions. CB Health Insurance has the necessary knowledge and expertise to assist both employers and employees who are considering Health Savings Accounts.
- Dental Coverage: May be purchased as a standalone plan or as a rider (an add-on) to a group health plan.
- Vision Coverage: May also be purchase as a rider (an add-on) to group health plans.
Important Definitions:
Office Visit Co-Payment: Employee payment for office visits (Options from $10-$50) It is common to see 2 copayments, a lower one for a Primary Care Physician, and a higher copay for a Specialist. (ie. $25 PCP / $50 specialist).
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 $250-$2500). The insured is responsible to pay the deductible before the insurance companies start paying any benefits. The deductible will apply in most cases to a hospitalization, surgery, and tests such as an MRI or Cat Scan. Deductibles are typically waived when a Dr. copay or RX copay applies. NOTE: Under the New Healthcare Law (ACA), small groups with 2-50 employees are not allowed to have a deductible that exceeds $2000 for an individual and $4000 for family. However, some plans with $2500 deductibles are being allowed as long as they meet the minimum value required to be offered by Employers.
Network of Participating Physicians: Doctors who are contracted with the plan. Providers sign a contract with the insurance company and agree to receive specific payments for services. In addition, they agree not to charge the patient anything over and above this charge. So when dealing with a network, it is to your benefit to go to a Physician that is IN the insurance company network. (If you go outside the network, there is no arrangement and you could receive a bill from the provider for any charges over and above what the insurance company pays.)
RX Coverage: Coverage for prescribed medications. Tiered RX plans may be available for Generic/Name Brand/Non-Formulary Drugs (i.e. $10/25/50)
Guaranteed Issue: In Illinois, no one can be declined due to a pre-existing condition for group health insurance. They may however, be subject to a pre-existing condition exclusion for six months if they have had a lapse in coverage of over 63 days in the past 18 months.
COBRA or IL Continuation:
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. Terminated employees can keep the COBRA coverage for a maximum of 18 months. (Other rules apply for death and divorce, which offer 36 months of coverage.) The Employer is not allowed to charge more than 2% of the premium for administration costs; in many cases, companies do not charge any more than the health premium. COBRA is the Federal Law that applied to companies with 20 or more employees.
In Illinois, companies with two to nineteen employees must continue to provide coverage for twelve months after termination; this is referred to as Illinois Continuation. 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.
Additional considerations for the employer:
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.
AFFORDABLE CARE ACT MANDATE:
The health insurance law called ACA (and referred to by some as Obamacare) has 2 mandates: 1) individuals must purchase health insurance beginning Jan 1, 2014 and 2) Employers with 50 or more Full Time Equivalent (FTE) Employees must offer health insurance or pay a penalty of $2000 per employee. On July 2nd, the government announced a delay of the Employer Mandate by one year. In an effort to make reporting simpler, the IRS is working on some new regulations that relate to the Employer Mandate. Starting January 1, 2015, the Employer mandate will be in force and business must comply or pay a penalty.
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 CB Health Insurance , we are committed to educating employers and helping you to streamline your plans during these difficult economic times.