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Group Health Insurance FAQ

Alvin Nelson
February 19, 2021
Alvin Nelson

group health insurance faq

The following are the most frequently asked questions about group health insurance: what it is, how it works, and where to find the best premiums and deductibles.

These group health insurance FAQs outline the most vital information for consumers to make a sound decision on health coverage.

What is group health insurance?

Essentially, group health insurance plans work well for businesses that wish to offer health benefits to employees.

Group coverage differs from individual coverage because consumers will have to pay for premiums, deductibles, and co-pays.

Employers share these costs as employees pay into the plan through modest deductions from monthly paychecks.

Overall, group plans cost less on average, which is why some small businesses prefer group insurance.

How much do group health insurance plans cost on average?

Insurance companies give better rates to group plans than individuals. From insurance companies' perspective, having a group plan lowers their risk, thus passing along savings to policyholders.

At the time of this writing, the average price of employer-sponsored group health insurance was approximately $7,000 annually for single coverage (i.e., plans that don't cover dependents).

Depending on the type of group plan, businesses will pay a significant portion of yearly premiums, leaving deductibles and the remainder of premiums costs for consumers to pay out-of-pocket.

Are all group health plans the same?

No, group plans aren't one-size-fits-all; insurance companies can offer a broad range of group health insurance.

For example, some group plans allow employees to choose their benefits; others force employees into one benefits package.

The situation truly depends on the level of coverage an employer purchases.

Under the Affordable Care Act, does every business need to provide group insurance to employees?

No, no law states employers must provide coverage no matter how small they are. The ACA says explicitly that 50-100 employees are the cut-off for small group insurance requirements.

The provisions of the ACA state that a company with more than 50 full-time equivalent employees must offer health coverage.

Group health plans are the ideal solution if businesses can afford the annual premiums and have the means to deduct cost-sharing from employee's salaries.

The caveat is that businesses with less than 50 full-time equivalent employees don't have to provide health insurance.

In this instance, employees would have to carry private insurance plans subsidized by state and federal marketplaces.

Adding to the confusion, the Obama administration in 2016 delayed regulations for small group insurance, which would have altered the definition of "small group" to a minimum of 100 full-time equivalent employees.

What is a full-time equivalent employee?

The ACA defines full-time equivalent employees as a collection of part-time workers whose total labor amounts to the hours worked by a full-time employee.

The typical 40-hour workweek adds up to 2,080 hours annually. Since some businesses don't rely on many full-time workers (e.g., restaurants and bars), they choose to hire a team of part-time workers instead.

The intent of the ACA's provision for equivalent employment is to discourage businesses from using an utterly part-time labor force to circumvent ACA employee protections and avoid fines.

Are group health insurance plans for all businesses?

Businesses with at least one employee can purchase specific group health plans, but this feature doesn't apply to every insurer. They can still set requirements on what they consider groups.

Can businesses choose to cover only some employees but not all?

Yes, businesses can choose which employees they include in a group plan. The catch is that this decision can't be discriminatory, unfair, or illegal.

For example, employers can exclude hourly workers or part-time workers from group plans, only providing health coverage for salaried employees.

The key is that the decision needs a justifiable business objective, not excluding employees to save a buck or two on premiums.

Can a family purchase a group health insurance plan?

The answer to this question is another source of confusion for consumers.

Technically, family health insurance is a separate offering from group coverage as families' health needs differ from employees' general health needs.

An individual health plan might automatically include coverage for dependents, but some programs don't.

The situation depends on the type of coverage purchased as insurance carriers have wide latitude in paying out benefits and who gets coverage and who doesn't.

How to find group health insurance quotes works hard to streamline the search for health insurance, helping consumers find the best health plans and rates.

Usually, searching for health insurance is a time-consuming, complicated process. Consumers don't have a way to quickly compare premiums, deductibles, co-pays, and benefits without doing a lot of research.

In particular, group health insurance is popular among small businesses, but it's not easy to compare rates nationally.

Health insurance benefits and costs differ based on the type of plan consumers choose, so gives patients a simple online platform to compare rates.

A short personal interview and a zipcode are all consumers need to start comparing prices.

The information patients need to provide are:

  • Gender
  • Date of birth
  • Pre-existing health conditions
  • Marital status
  • Major life events (e.g., moving to a new state)
  • Tobacco use

Also, consumers will need to input necessary contact information, including a 2020 income estimate.

Click to find the best group health insurance plans for 2021 and learn more about

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The plans represented on are Medicare Advantage HMO, PPO and PFFS organizations and stand-alone prescription drug plans with a Medicare contract. Enrollment in any plan depends on contract renewal. If you are paying Medicare Part B premium, you must continue to pay it to maintain coverage.

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Part B Premium give-back is not available with all plans. Availability varies by carrier and location. Actual Part B premium reduction could be lower. Deductibles, copays and coinsurance may apply.

Based on median Medicare Advantage benefit amounts for dental available across multiple plans and metro areas. Not all benefits available in specific plans or regions.

This information is not a complete description of benefits. Contact the plan for more information.

Limitations, copayments, and restrictions may apply.

[Benefits, premiums and/or copayments/coinsurance] may change on January 1 of each year.

Advertised Pricing:

There are several factors that impact your monthly premium; including your age, geographical location, annual income, dependents, and the type of plan you choose. Monthly premiums do not include out-of-pocket costs.

The advertised price may not be typical. It was generated using the Kaiser Family Foundation's subsidy calculator that was accessed on September 16, 2020. The following parameters were used: 21 year old adult, non-tobacco user, annual income of $24,700 in 2020, no children, and no available coverage through a spouse's employer. The resulting monthly premium was $30 per month (or $360 per year after $2,751 in subsidies) for a Bronze Plan. Even when using the same parameters, the resulting premium and subsidy calculations may be subject to change.