Group Health Insurance
Did you know, group health insurance may be a requirement?
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In a competitive job market, companies with better benefit plans land and retain the best talent. Even as a small business, an owner has to consider what benefit plans they can offer to get the talent they need. One of the best starting places is with Group Health Insurance.
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Group health plans are employer- or group-sponsored plans that provide healthcare to members and their families. The most common type of group health plan is group health insurance, which is health insurance extended to members, such as employees of a company or members of an organization.
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Group health insurance plans offer numerous tax benefits to both employers and employees. The money employers pay toward monthly premiums is tax-deductible, and employees' premium payments can be made pre-tax, which may reduce their total taxable income.
Some employers must provide group health plans to their employees because of the "Employer Mandate".
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Employer Mandate 101
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Under the Affordable Care Act’s employer shared responsibility provisions, certain employers (called applicable large employers or ALEs) must either offer minimum essential coverage that is “affordable” and that provides “minimum value” to a percentage of their full-time employees (and their dependents), or potentially make an employer shared responsibility payment to the IRS. The employer shared responsibility provisions are sometimes referred to as “the employer mandate” or “the pay or play provisions.”​
ALE (Large Employers): Whether an employer is an ALE in a particular calendar year depends on the size of the employer’s workforce in the preceding calendar year. To be an ALE for a particular calendar year, an employer must have had an average of at least 50 full-time employees (including full-time-equivalent employees) during the preceding calendar year.
Requirements: Employers must offer health insurance that is "affordable" and provides "minimum value" to 95% of their full-time employees and their children up to the end of the month in which they turn age 26, or be subject to penalties, otherwise known as the Employer Shared Responsibility Payment.
Penalties: If an employer does not offer coverage, or does not offer at least one medical plan option that provides “affordable,” “minimum value” coverage, the following penalties will apply if any full-time employee purchases coverage on the Marketplace and receives a federal premium subsidy.
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Employers are required to offer coverage to at least 95% of full-time employees and dependents. A penalty amount: $2,570 per full-time employee minus the first 30.
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Employers must offer at least one plan that provides “minimum value” (pays at least 60% of the cost of covered services). A penalty amount can result: The lesser of:
(1) $3,860 per full-time employee receiving a federal subsidy for coverage purchased on the Marketplace, or
(2) $2,570 per full-time employee minus the first 30.
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Employers must offer at least one plan that is considered “affordable” (≤ 8.39% in 2024). A penalty amount can result of the lesser of:
(1) $3,860 per full-time employee receiving a federal subsidy for coverage purchased on the Marketplace, or
(2) $2,570 per full-time employee minus the first 30.
Affordability
There are 2 ways to calculate Affordable Care Act (ACA) affordability in 2024.
Rate of Pay Safe Harbor: For hourly employees, multiply their lowest hourly rate by 130 and then multiply that by 8.39%. For salaried employees, multiply their monthly salary by 8.39%. The result is the maximum monthly contribution that the employee can pay to meet the affordability standard.
Household Income: The employee's share of the premium for the lowest-cost self-only coverage cannot exceed 8.39% of their W2 gross household income
Retirement
A health plan meets the minimum value standard if both of these apply:
1. It’s designed to pay at least 60% of the total cost of medical services for a standard population.
2. Its benefits include substantial coverage of physician and inpatient hospital services.
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Group Health Insurance Solutions
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Whether your a large employer(ALE) or a small business who wants to attract better talent, Heartwood can help you find the right group solution for your unique situation.
There's two broad types of group health plans: available: Medical Plans and Ancillary/Supplemental Plans
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Medical Plan - HMO
Health Maintenance Organization (HMO): A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency.
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Medical Plan - POS
Point of Service (POS): A type of healthcare insurance that combines features of both HMOs and PPOs, allowing members to see providers within the network or, for a higher cost, utilize out-of-network providers, while still requiring a primary care physician to coordinate care.
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Ancillary - Critical Illness
Critical illness insurance provides additional coverage for medical emergencies like heart attacks, stroke, cancer, or other serious illnesses .
These illnesses often incur higher than average medical costs, the critical illness policies pay out cash to cover those overruns where traditional health insurance may fall short.
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Medical Plan - PPO
Preferred Provider Organization (PPO:) A type of health plan where you pay less if you use providers in the plan’s network. You can use doctors, hospitals, and providers outside of the network without a referral for an additional cost.
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Ancillary - Dental
Dental Insurance covers services related to teeth and gums, like preventive care/ annual cleanings. Not all procedures are covered; some cosmetic procedures, such as crowns or whitening, are not.
Deductibles, co-pays, and coinsurance will apply. Many plans have annual coverage maximums ranging from $750 to $2,000.
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Ancillary - Accident Protection
Accident insurance is an ancillary insurance plan that provides financial protection in case of injuries or death resulting from a covered accident, helping to cover costs like medical expenses or lost income.
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Medical Plan - EPO
Exclusive Provider Organization (EPO): A managed care plan where services are covered only if you use doctors, specialists, or hospitals in the plan’s network (except in an emergency).
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Ancillary - Vision
Vision plans generally cover or provide discounts on these products and services:
• Annual eye examinations
• Eyeglass frames
• Eyeglass lenses (including lens coatings and enhancements)
• Contact lenses
• Discounted rates for LASIK and PRK
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Ancillary - Disability
Disability Coverage: An insurance plan that pays a portion of a person's income if they are unable to work due to an injury or illness. There are different types of disability policies, including short-term disability (STD), long-term disability (LTD), and Social Security Disability Insurance (SSDI).