Large Buisness

Large Business With More than 50 Employees
At a Glance
Advantages of Offering a Group Health Plan
Requirements for Group Coverage
Determining Eligibility of Employees and Dependents
Comparing Group Health Plans

Large Business With More than 50 Employees

Today, employers are not required to offer workers or their dependents medical insurance. Several federal and state laws govern various aspects of how businesses must handle insurance issues. Which laws apply to your business depends on how many employees you have and the type of coverage you provide.

Large business owners, defined as those with more than 50 employees, have the greatest number of options of buying and offering group health insurance to attract and maintain highly skilled employees.

At a Glance

This section provides an overview of information about group health plans for large businesses:

Advantages for Offering a Group Health Plan
Requirements for Group Coverage
Requirements to Offer Continuation of Coverage
Determining Eligibility of Employees and Dependents
Comparing Group Health Plans
Additional Resources

Advantages of Offering a Group Health Plan

Group Health Plans for businesses offer several advantages including:

Lower Hiring Costs:
Looking for, hiring, and training new employees takes time and costs money. Having group insurance may help you to recruit and retain talented employees. Employees may accept slightly lower wages if those wages come with health insurance. In addition, employees can benefit tax-wise and in convenience by paying premiums right from their paychecks.

Reduced Absenteeism and Injury:
When employees don't have health insurance, they wait longer to seek treatment, which can lead to increased illness or disability. Healthy employees are less likely to injure themselves and more likely to do their jobs well.

No Exclusions due to Family History:

Group health plan applications differ from individual health plan applications in that the insurance company is not allowed to ask about family history or genetic test results of eligible employees (including owners) and their dependents.[i]

Requirements for Group Coverage

California employers who want to offer group health insurance, health maintenance coverage, or group life insurance must comply with a number of state statutes and regulations. This area is a complex area/field of regulations because usually the employer's plans are covered by both California laws and the Employee Retirement Income Security Act (ERISA). The two sources of law can overlap, and even contradict each other, although in many cases the federal law preempts state regulation. Generally, plans that are regulated by state insurance laws are exempt from preemption by ERISA.

The California laws regulating group health plans are similar to ERISA in that they establish minimum standards for coverage, limitations on cancellation and conversion, and procedures to follow upon termination of employment. For example, employers who provide group insurance coverage are bound by California law setting the time period in which a fired employee may convert his or her coverage. Similarly, dependents of employees who are fired and then die within a set period of time may claim benefits.

Determining Eligibility of Employees and Dependents

When a business owner purchases a group health insurance plan, they must determine if part-time employees will be eligible for coverage. This decision is guided by certain legal requirements such as:

If an employer offers group health coverage to any full-time employees, then it must be offered to all full-time employees (defined as those working 30 or more hours per week).

If the employer offers coverage to any part-time employees, then it must be offered to all part-time employees (defined as those working 20 to 29 hours per week)

Generally speaking, if you purchase a group plan to cover your employees then the dependents of eligible employees are also eligible for coverage under that group plan. Dependents include spouses, children, and in some cases, unmarried domestic partners. Dependents cannot enroll for coverage unless the employee has enrolled.[ii]

Requirements to Offer Continuation of Coverage

At the time of termination, or under certain other circumstances, an employee may be eligible for the continuation of health care benefits as recognized under federal and state law, referred to respectively as COBRA and Cal-COBRA. In many significant respects, the requirements of Cal-COBRA are the same as those under COBRA. However, under federal law an employer must normally employ more than 20 employees (both full-time and part-time employees count) to be subject to COBRA requirements. Pursuant to Cal-COBRA, if the employer has an insured plan, as few as two employees will trigger obligations to continue medical benefits.[iii]

For more information, go to the section on this website entitled, “COBRA [insert link].”

Comparing Group Health Plans

Health plans are complex. They're often loaded with so many details that it can be difficult to focus on the issues that are most important. Generally speaking, you should evaluate and compare plans on three dimensions: benefits, choice, and cost.[iv]

Benefits:

You'll want to make sure the plan benefits include the services most important to you and your employees. (Also keep in mind that, typically, the more that's covered, the more the plan will cost.)

Choice:

Managed care plans typically limit participants to a network of providers, and charge more if participants visit providers outside the network. You will want to know the physicians and hospitals that are considered “in network.” The California Department of Insurance offers an interactive checklist to use to compare health plans. Go to http://www.insurance.ca.gov/0100-consumers/0070-health-issues/health-plan-comparison-and-checklist.

Cost:

Besides the monthly premium, many plans involve what's known as "cost-sharing," in which participants pay a fee at the time of service (a copayment) or a percentage of the total cost (called co-insurance). You can compare pricing and benefit information for individual policies available in your area in a number of ways:

Use the Health and Human Services’ Insurance Finder [insert link: http://finder.healthcare.gov/] tool.
Search for privately funded internet resources such as ehealthinsurance.com [DP2] [insert link].
Contact a licensed insurance broker. Be sure to use the License Name Search [insert link http://www.insurance.ca.gov/license-status/index.cfm] offered by the California Department of Insurance to find out if a broker is licensed and to see a list of the companies they are authorized to represent.

Additional Resources

HealthCoverageGuide.org – Objective Information for California Small Business http://www.healthcoverageguide.org/guidepartone/group-coverage-basics.aspx [MB3]

Healthcare.gov – Insurance Finder Tool
http://finder.healthcare.gov/

(Note: If you have employees working in San Francisco, you may be required to make an annual health care expenditure on behalf of those employees in accordance with the requirements of the Health Care Security Ordinance.)

[i] Georgetown University Health Policy Institute, . (2009, July). California consumer guide. Retrieved from http://healthinsuranceinfo.net/statecoverageguides/CaliforniaHealthInsuranceGuide.pdf

[ii] California HealthCare Foundation, . (n.d.). Health coverage guide – who is eligible for coverage?: part 1 - getting started. Retrieved from http://www.healthcoverageguide.org/guidepartone/how-to-evaluate-plans.aspx

[iii] Georgetown University Health Policy Institute, . (2009, July). California consumer guide. Retrieved from http://healthinsuranceinfo.net/statecoverageguides/CaliforniaHealthInsuranceGuide.pdf

[iv] California HealthCare Foundation, . (n.d.). Health coverage guide - evaluating plans: part 1 - getting started. Retrieved from http://www.healthcoverageguide.org/guidepartone/how-to-evaluate-plans.aspx

[DP1]I can’t write this without SME support. There are several resources that spell out what is required and what is protected with regard to small businesses. But there is nothing specific to Large Businesses that I can find aside from a site that says that there a “a thicket of ERISA and State regulations that conflict with one another” (see highlighted section below).

[DP2]Do you want to give them free advertising?

[MB3]Not found online – Can someone click this link – maybe it’s my browser?

San Diegans for Healthcare Coverage, A Coalition for Health