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What is group health insurance?
Group health insurance is simply one insurance policy that covers a group of people. It usually is comprised of employees, but many times, in states outside of California, it is a group of people in clubs, church/religious organizations, trade associations, chambers of commerce, or special interest groups.
What are the advantages of group health insurance? |
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Lower Price
Group plans are usually cheaper because insurance companies profit from having more people on their plans, even at a lower cost to participants.
No Pre-existing Condition
Insurance company will cover you no matter what your health status is. There are no physical exams or extensive medical history questionnaires to complete.
Relieves Payroll Tax Burden
There is a tax code that allows the employee portion of certain health and life insurance premiums to be paid with pre-tax dollars. In addition, premium contributions may be considered employer dollars for tax purposes. As a result, a company’s total taxable payroll and payroll related taxes are reduced.
Less Income Tax
Every employee in the company who makes a contribution toward their insurance benefits will reduce their taxable income by the amount of that premium contribution, this will increase their take home pay because they will pay less income and social security taxes.
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Do I qualify for a business group health plan?
- You only need two employees or owners to qualify for a business group health plan. These two individuals may be an employer and employee, two partners, or two officers of a corporation.
- Usually, you will be asked to provide documents such as DE-6 (State Quarter Wage Report), business license, or articles of incorporation to verify the legitimacy of your business.
What do I need to know before applying for a group health insurance?
- The employer must contribute a minimum of 50% towards the employee only premium. However, the employer is not required to contribute to the premium for dependents.
- In order to qualify for a group health insurance, at least 75% of all eligible employees must enroll. (Eligible employees are any employees who work more than 30 hours per week.)
- The employer may not include in the group health plan any part-time employees who work less than 20 hours per week.
- No employee may be denied coverage due to pre-existing conditions.
- The employer will choose the health insurance plan(s) that will be available for its employees. Most companies have options in which they allow employees to choose from a variety of plans.
- The employer must decide the length of time a new hire must be with the company before he/she can be added to the group health plan.
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How can I lower my small group health insurance cost? |
- Decrease employer contributions. The simplest way is to lower your share of the cost by decreasing your contribution. You may contribute as little as 50%.
- Choose a higher deductible. Typically, the higher the deductible, the less you will pay for the policy.
- Cut the “extras.” You’ll notice a significant decrease on your premiums by eliminating coverages for dental, eye care, and other add-ons.
- Comparison shop and switch plans. Insurance rates and plans change often. The best plan for your company last year might no longer be “the best” this year. Re-shop (or have your insurance agent re-shop) to determine whether you’re getting a plan that best fits your needs and budget.
- Work closely with your agent. Working with an experienced insurance professional can prevent you from spending extra money. With almost 20 years of experience, KCAL professionals are knowledgeable about all health insurance benefits, guidelines, and limitations. We will evaluate your specific needs and find you the right plan at the lowest cost, with a hassle-free, simple, buying process.
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