Taking Care Of Your Business By Taking Care of Your Employees
When California businesses offer employee group health insurance to their workforce, there can be substantial benefits to both the employer and its employees. Providing an affordable group health insurance plan with robust benefits can help your business attract and retain top talent, reduce absenteeism and sick days, and increase employee productivity. All of these significant upsides to offering health coverage will save your business money in the long run.
But obtaining this essential coverage can be challenging if you don’t understand what group health insurance is, how it works, or how to evaluate and choose a plan that’s best for you and your workforce. We can help.
Employee Group Health Insurance Defined
When an employer offers group health insurance coverage to its employees, they usually do so through group health insurance plans. In California, health insurance companies such as Blue Shield of California, Kaiser Permanente, Aetna, Anthem Blue Cross of California, HealthNet of California, and UnitedHealthcare offer multiple options for group health insurance specifically designed for the needs and budgets of small businesses.
A California business that wants to enroll in employee group health insurance selects a plan from one of the carriers licensed in the state and purchases insurance for their “group” of employees and their dependents. Companies can choose to offer coverage to full-time employees only, or they can offer it to part-time employees as well if they so choose.
Once a company enrolls in a group health insurance plan, the company will pay the full costs of coverage to the health insurance company. Businesses then recover some of these costs by deducting premium contributions from the paychecks of employees who enroll in the plan.
Do All Companies Need to Offer Group Health Insurance to Employees?
No. Under the Affordable Care Act (ACA), companies with fewer than 50 full-time or “full-time equivalent” employees are not legally obliged to provide group health insurance coverage to their employees.
The ACA defines a full-time employee as an individual who works 30 hours or more every week or 130 hours every calendar month, including paid leave time and vacation days.
However, California companies with fewer than 50 full-time employees may still need to offer health insurance if they employ 50 or more full-time equivalent (FTE) employees. The Internal Revenue Service provides helpful guidance that explains whether an employee qualifies as an FTE employee and whether your business falls above or below the 50-employee standard.
The ACA further defines companies with 50 or more full-time or FTE employees as “applicable large employers.” These larger businesses have a legal obligation to offer an ACA-compliant plan to at least 95 percent of their full-time employees.
Can Any Business Purchase Group Health Insurance Insurance?
No. Group health insurance is probably not an option for self-employed individuals or sole proprietorships with no employees (even if they hire independent contractors occasionally). If you are self-employed or a sole proprietor and need health coverage, an experienced health insurance broker like Preferred Insurance can help you find individual and family health insurance plans that fit your needs and budget.
However, if your California small business has even one full-time employee, group health insurance is likely available so long as that employee:
- works at least 30 hours each week
- is classified as an employee and not as an independent contractor
- is not your spouse or other relative, and
- is not a partner or part-owner of your business
What’s The Best Way For Businesses To Purchase Health Insurance for Employees?
Often, the first step is the hardest for companies considering employee group health insurance. Choosing among several competing group health insurance plans without understanding the details and pros and cons of each one can be confusing and overwhelming. And most busy business owners don’t have the hours needed to educate themselves about group coverage options, the enrollment process, and plan administration.
That is why so many California business owners work with an experienced group health insurance broker when looking for coverage for their employees. A broker’s job is to evaluate and compare plans and match the best ones to each company’s specific needs.
Help for California Business Owners Looking for Employee Group Health Insurance Options
California business owners searching for options for employee group health insurance do not have to navigate unfamiliar waters on their own. By working with an experienced group health insurance broker, you can find answers to your questions and practical, affordable coverage options to take care of your most precious commodity, your employees.