Frequently Asked Questions By Topic

Transcription

1 Small Business FAQ s Frequently Asked Questions By Topic Small Business Health Insurance Why should I provide group health insurance to my employees? How much of the employees' premium is the employer required to pay typically? Are tax benefits that accompany buying group health insurance? Does my company qualify for group health insurance? What are the different kinds of group health insurance? What is a Preferred Provider Organization (PPO)? What is a Health Maintenance Organization (HMO)? What is a Point of Service (POS) plan? What is a Health Savings Account (HSA)? What is a multi-plan? Is dental coverage automatically included? What is the process for obtaining small business coverage? How do I choose the best plan for my company? Will my final group health insurance costs be the same as the rates on my initial quote? Why do you need to know my ZIP code? Who do I contact if I need help? The only two employees in our company are my spouse and me. How should this information be entered? Should I only include employees who want insurance? Am I eligible to enroll under a small business health insurance plan? Why should I provide group health insurance to my employees? You may be a business owner without health insurance coverage for yourself and your family because of the high cost of individual plans. You might be pleasantly surprised to learn that as a business owner, you may be eligible for lower rates for your family insurance than through the individual market, while still receiving the same level of benefits. Research has demonstrated time and time again that the only thing employees appreciate more than monetary compensation is the health insurance coverage offered to them by their employer. There are numerous reasons to offer group health insurance benefits to your employees, not the least of which, is the ability to offer competitive benefit packages that will naturally attract and retain the best workers for your company. Another consideration is the fact that various tax incentives are available to both you and your employees for participation in a group health insurance plan. For example, as a business owner, you can deduct 100% of the premiums you pay annually on qualifying, ACA compliant, group health plans. Yet another benefit is the reduction of payroll taxes as a direct result of including health insurance as part of comprehensive employee benefits. Finally, your employees will have the opportunity to avoid tax penalties when paying their

2 premium percentage. Consideration of these incentives is imperative to effectively determine the affordability of a specific health insurance plan. How much of the employees' premium is the employer required to pay? Usually, an employer is required to split health insurance costs right down the middle, covering 50% of the employee's monthly premium; however, different states and insurance companies have different minimum employer contribution levels. In the case of the 50/50 split, the employee is responsible for the remaining 50% of his or her premium as well as 100% of the premium for any dependents. It is up to the employer to decide whether or not to cover more than the minimum contribution. While completing an application with the insurance company of your choice, you will have the opportunity to specify your level of contribution for your employees and their dependents. Are there tax benefits that accompany buying group health insurance? Employers who offer group health insurance are frequently eligible for considerable tax advantages. As a business owner, you can deduct 100% of the premiums you pay annually on qualifying group health plans. Another benefit is the deduction of payroll taxes as a direct result of offering group health insurance as part of a total compensation package. Additionally, your employees will have the opportunity to pay their portion of the monthly premium on a pre-tax basis. You will want to check with your accountant or tax advisor to confirm the specific tax benefits that are available for your area and business. Does my company qualify for group health insurance? There are three criteria when determining eligibility. First, you must have filed tax documents that authenticate that there are at least two owners, officers, partners, and/or employees that work full time.. Second, the purpose of your business cannot be to acquire insurance and you must be able to prove via business license, articles of incorporation, or articles of organization that you own a legally recognized company. The final criterion for eligibility rests on simply meeting the insurance company's requirement for ratio of employer contribution. Please note that in addition to the above listed items, each state and insurance company will have its own eligibility criteria. What are the different kinds of group health insurance? PPO (Preferred Provider Organizations) and Managed-Care are the two main types of individual and family health insurance plans. Generally speaking, the most important differences between the two categories are the number of healthcare providers from which to choose, the amount of out-of-pocket expense, and the bill-paying process. Normally, PPO plans offer more choices of healthcare providers than managed care plans. Healthcare provider networks are the main structures utilized by managed-care plans. Insurance companies and healthcare providers within a network develop predetermined rates for specific services, and the providers agree to perform those services for managedcare plan patients as well as submit the claim to the insurance company. Overall, there are three main types of health insurance plans. These include Health Maintenance Organizations/Accountable Care Organizations (HMOs/ACOs), Preferred Provider Organizations (PPOs), and Point of Service (POS) plans. PPO and POS plans are very

3 similar in network of providers within a state and vary somewhat in national coverage of available providers whereby PPO plans have greater state and nationwide providers than a POS carrier plan network stronger in the state the company plan is domiciled in and has a smaller potential list of providers nationwide.. To summarize the two main categories of plans, a PPO plan offers a wider selection of healthcare providers and utilizes a provider reimbursement system; a managed care plan provides the options of lower out-of-pocket costs and very little paperwork along with a reduction in healthcare provider choices. What is a Preferred Provider Organization (PPO)? Although it is not required that you do so, when you use the insurance company's innetwork of preferred doctors and hospitals, a PPO plan will have lower costs. If you choose an out-of-network provider, the cost will be much higher. In-network healthcare providers have predetermined rates, usually nominal, for the provision of each service to the health insurance plan's members. Consider the following example: Let's assume that the out-ofnetwork coverage rate is sixty percent. This means that the insurance company will pay sixty percent of what that service would have cost had you gone to an in-network provider. If you received $1000 worth of services from an out-of-network provider and those same services were available from an in-network provider for $500, the insurance company will only pay sixty percent of $500, which is $300, leaving you responsible for the remaining $700 (which is a higher cost than an in-network provider). Another consideration is that not only may up-front payment be required, but the out-of-network provider will not submit your claim for reimbursement and may balance bill you for any costs above the in-network negotiated fee schedule.. It is generally not required to pick a primary care physician which allows plan members to seek medical services from any doctor or specialist within the network without a referral. While one of the most popular qualities of PPO plans is the flexibility in choosing providers, it is essential to confirm that your preferred doctor or neighborhood hospital belongs to the network. Additionally, if you will be including children in your plan, preventive and well-child care benefits will be of special importance to you. An annual deductible typically must be met before the insurance company starts covering your medical bills. A co-payment may be required for certain day-to-day services or it may be necessary for the plan member to cover a certain percentage, or coinsurance, of the total charges. What is a Health Maintenance Organization (HMO)? The biggest benefits of a standard HMO plan are the lower out-of-pocket healthcare expenses, the strong focus on preventative medicine, and nominal co pays that are independent of a deductible. However, more often than not, these features are paired with more limited options as far as freedom to choose specific physicians or hospitals. Unlike a PPO, the selection of a primary care physician (PCP), who will handle the majority of your healthcare needs, is required. With an HMO plan, your insurance claims are submitted for you by the provider. It is important to note that should you decide to receive services outof-network, an HMO will most likely cover none of the cost except for Emergency situations only. In addition, even in-network providers are not covered for services rendered without being referred by your PCP. In order for the insurance company to cover specialist visits, it is up to the discretion of the PCP to make a referral.

4 What is a Point of Service (POS) plan? A POS plan is a cross between an HMO plan and a PPO plan. Similar to an HMO, it is required to select a primary care physician (PCP) whose services will usually be provided independently of a deductible. POS plans also share the HMO's concentration on preventive medicine. The highest percentage of coverage will almost always be for services rendered or referred by your PCP. As with PPOs, POS plans allow visits to out-of-network providers and generally require payment of the deductible and less of the costs will be absorbed by the insurance company. Another consideration is that not only may up-front payment be required, but the out-of-network provider will not submit your claim for reimbursement and they can balance bill you for additional charges above a negotiated in-network fee schedule.. What is a Health Savings Account (HSA)? The freedoms offered by HSAs have been available since the January 1, 2004 legislation. An HSA is the most progressive alternative to traditional health insurance, allowing you to set aside money specifically for healthcare in an investment savings account without any tax penalties whatsoever. HSAs facilitate the payment of current health expenses while simultaneously saving for future medical and retiree health expenses. Not only is the money in your account solely controlled by you independently of any third party or health insurer, but only you have the authority to determine what types of investments will be made to grow your funds. In order to be eligible for an HSA, you must first be covered by a High Deductible Health Plan (HDHP). Standard HDHP costs are usually lower than those of traditional health care, so the money saved on insurance expenses can be put directly into the Health Savings Account. Please see our HSA examples of significant savings with HSAs. Similar in function to IRAs, the popularity of HSAs and HSA-eligible health insurance plans is rapidly spreading. This is why: When used in combination with an HSA-eligible high deductible health insurance plan, HSAs allow you save for retirement while paying for current medical expenses. The standard annual premium on an HSA-eligible high deductible plan is much less expensive, usually around $1000 less, 15 20% less,, than the annual premium for a similar PPO deductible health insurance plan. Not only are contributions to an HSA 100% deductible, but they may also be made with no income tax penalties, up to set limits per year. You control and invest the funds in your HSA with the option of simply allowing unused funds to remain in the account and accrue interest year-to-year, tax-free. Additionally, the unused monies in the HSA bank account rolls over from year-toyear. Money in your HSA can be withdrawn to pay for qualified medical expenses with no tax penalties and funds can also conveniently be used for purposes other than healthcare, although there are taxes and fees associated with non-medical withdrawals. Similar to IRA guidelines, sole ownership and control of the money in an HSA account belongs to the employee. However, one of the main areas in which the two accounts differ is that an employer does have the option of contributing to the funds in an HSA.

5 Before choosing an HDHP for use with an HSA, it is important to be sure that your selected high-deductible plan is HSA-eligible. What is a multi-plan? A multi-plan is a popular option with employees because it enables them to access group coverage from an employer while still having a certain amount of freedom in which plan they choose. Usually, an employer will offer several different plans from an insurance company and allow employees to opt for the plan that best meets their medical needs and financial circumstances. Since there is more than one plan, a possible base and buy-up plan offering with benefits and coverage levels varying based on each selected plan. Is dental coverage automatically included? No. Dental coverage is not one of the features usually included in a standard health insurance plan; it is often available as a benefit rider with a group health insurance plan. After you have determined which plan will best suit your needs, you will then have the option of adding other types of insurance plans, such as dental, vision, and life coverage. What is the process for obtaining small business coverage? Creative Benefit Strategies strives to ensure your complete satisfaction as you seek coverage for your small business. Our process differs from other companies in that instead of viewing impersonal, and often less than accurate quotes online, Creative Benefit Strategies provides a free one-on-one consultation to determine your exact needs. This is because we want to ensure that we personally select the best options for your company and not rely on an automated program. Your company and its needs are unique. To honor that distinctiveness, Creative Benefit Strategies offers the personalized attention of our health insurance advisors to guarantee that you receive the best plan for your needs and budget. Here are the steps to finding the right small business coverage for you through Creative Benefit Strategies: 1. You should begin by completing the small group form, which will provide us with critical information about your small business. 2. You will then be invited to participate in a conference call with your personal health insurance advisor to discuss your needs, budget and concerns. 3. It will be necessary for you to provide to Creative Benefit Strategies your census and current coverage information. 4. Your health insurance advisor will then go to all of the carriers in the marketplace to obtain personalized quotes for your business. 5. After analyzing the quotes to determine the best fit, your health insurance advisor will prepare a summary and recommendation for your review. 6. You and your health insurance advisor will work together to finalize your small group insurance program. 7. Creative Benefit Strategies will prepare individualized enrollment kits and will assist you in communicating the enrollment plan and process to your employees. Before your annual renewal, your health insurance advisor will review your current plan with you to determine if it still meets your individualized needs. Of course, your advisor will be available at any time to help you with any questions you have or issues you encounter.

6 How do I choose the best plan for my company? At Creative Benefit Strategies, we know that finding the best health insurance plan for your business can be complicated since there is no such thing as a one-size-fits-all plan. Frequently, health insurance terminology can be overwhelming and intimidating, resulting in confusion about available options. Creative Benefit Strategies is here to dispel any myths about health insurance and simply help you find the best health insurance for you, catered specifically to your needs and circumstances. We understand that the best plan for you and your company will be different than what might work for another company. Important pieces of information such as varied health care needs and financial constraints must all be considered. It is because we appreciate the diversity of our customers that we have created the following list of questions to help you and your employees find the perfect plan for your business. How frequently will medical services be utilized? Will coverage for items such as chiropractic care, dental, vision, or prescription drugs be a necessity for you or your employees? Is your main concern coverage in case of a major injury or illness or is strong dayto-day lower copay coverage more of a priority? How much of a monthly premium are you able to pay? Are you willing to pay an annual deductible before coverage begins in exchange for lower monthly premiums? How important is it to be able to see any doctor at your discretion? Are you willing to have all of your medial care coordinated through a primary care physician? It is important to have an understanding of the health care needs and the financial constraints of your employees, because in doing so, you'll be well-prepared to make smart choices about the health insurance plans offered in your area. It is important that you do not choose a plan that has many benefits that do not apply to you and your employees, because each benefit adds to the cost of the monthly premium. Be careful to NOT be overinsured having a very rich plan design that most of your employees may not use costing both the employer and the employee s additional premium monthly. Additionally, if you are looking at an HMO or PPO, it might be prudent to confirm that the doctor and/or hospital of your choice is on the provider list. Your health insurance advisor can walk you through this process step by step or just give you some expert advice to help you narrow down your options. Will my final group health insurance costs be the same as the rates on my initial quote? Probably not. For groups over 50 employees, Insurance companies utilize factors such as age, location, and health of the employees for whom you are applying for coverage to determine your final rates. Using criteria such as number of enrollees and preexisting conditions, potential claim costs, the insurance company will assess your group as a whole to arrive at a final monthly premium. The majority of the time, if the broker and group do a great job of submitting the case to underwriting initially, typically the proposed rates should hold as final rates with a margin of plus or minus a 10% variance in final enrollment count.

7 If your group is less than 50 employees, than the proposed rates will be the same for final no matter if there is any change in final enrollment. The under 50 employee market rates are now set nationally due to the new Health Care Reform ACA law. The rates will be agebanded and set for the plans selected to offer the employees. Why do you need to know my zip code? Each geographical area has its own "usual, customary, and reasonable" (UCR) rate that is based on the area's availability of certain services, the average cost of those services, and the number of providers in the area. As a result, health insurance rates also vary from area to area, frequently following the geographical boundaries of zip codes. Usually, the rates for each specific small group plan are based on the zip code where the employer's main address is located. Who do I contact if I need help? Your personal health insurance advisor is able to walk you through this process from beginning to end. At Creative Benefit Strategies, we believe in providing you with stellar customer service to address all of your health insurance needs. Call Us Just call anytime to speak to a health insurance advisor. Us Send us an at don@cbsarizona.com and we will get back to you as soon as possible. The only two employees in our company are my spouse and me. How should this information be entered? In order to be eligible for a small business group health plan, it is necessary to provide tax documentation that you and your spouse are separately compensated as full-time owners, officers, partners, and/or employees of your company. Additional documentation of forms will be required to verify state and income tax documentation. On the application, enter your information on separate rows leaving the Spouse column marked "No" for both of you. You may list any eligible dependent children under either spouse, but be sure not to duplicate dependent information. Should I only include employees who want insurance? All of your employees should be included on the census even if they don't plan to utilize the insurance you offer because the total group size is often a factor in determining your eligibility for certain plans and market segment rating. Be sure to follow the categorization of enrolled and eligible employees on the census form provided. It is best that you consult with an advisor to make sure your group census is accurate upfront to meet underwriting guidelines and to get the best rate possible from the insurance carriers.

8 Am I eligible to enroll under a small business health insurance plan? There are three criteria when determining eligibility. First, you must have filed tax documents that authenticate that there are at least two owners, officers, partners, and/or employees that work full time. Second, the purpose of your business cannot be to acquire insurance and you must be able to prove via business license, articles of incorporation, or articles of organization that you own a legally recognized company. The final criterion for eligibility rests on simply meeting the insurance company's requirement for ratio of employer contribution. Please note that in addition to the above listed items, each state and insurance company will have its own eligibility criteria.