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 Massachusetts 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. 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 a certification form verified with a WR-30.

The following items are also necessary for compliance:

  1. At least 75 % of the employees must be employed in Massachusetts
  2. Only 25 % can waive coverage without having other coverage elsewhere
  3. The employer must pay at least 10 % of the premium
  4. The employer has the right to decide on a waiting period for new employees to enroll in the plan - 0 to 6 months in Massachusetts

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. Eastern 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 $5-$50)

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 $500-$2500)

Network of Participating Physicians: Doctors who are contracted with the plan

RX Coverage: Coverage for prescribed medications. Many plans include 50 % coverage. Tiered RX plans may be available for Generic/Name Brand/Non-Formulary Drugs (i.e. $10/25/50)

Guaranteed Issue: In Massachusetts, no one can be declined due to a pre-existing condition. They may however, be subject to a pre-existing condition exclusion for six months if they have had a lapse in coverage of over two months.

COBRA or Insurance after work:

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.

In Massachusetts, companies with two to nineteen employees must continue to provide coverage for twelve months after termination. 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.

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 Eastern Insurance , we are committed to educating employers and helping you to streamline your plans during these difficult economic times.