As a Health Insurance broker, you are bound to get many questions from your individual clients as well as employers and their employees who may turn to you for employee benefits. Some of these questions may be easy to answer – like ones about which forms to use when signing up for coverage, or what carriers can I choose from, or are my dependents eligible to enroll.
Others may require more thought – or a conversation with your General Agent or the carrier or plan administrator. This column looks at seven of the most frequently asked questions and their answers.
Q1. Employer Question: As a small business, am I required to provide Health Insurance to my employees?
Answer: That depends on what you think of as “small business.” The Affordable Care Act (ACA) employer mandate requires employers with 50 or more full-time and full-time equivalent employees (FTEs) to offer insurance to employees and their children (up to age 26); those businesses that do not offer coverage face penalties. The amount of the penalty depends on the number of employees, whether coverage is considered “affordable” or not, and whether any employee elects to get coverage from an ACA public exchange (like Covered California in the Golden State and the Nevada Health Link in the Silver State). Word & Brown offers valuable tools to help you and your clients determine whether a business is subject to the employer mandate.
Q2. Employer Question: How much does it cost to offer Health Insurance?
Answer: Many factors influence the cost of insurance for employers. How many employees do they have? What type of coverage do they want (HMO, PPO, HSA-compatible, etc.)? What are the ages of those to be covered? Is coverage for employees only, employees and children, or employees and family (including spouses and dependent children)? Are there specific doctors and hospitals that need to be a part of the coverage offered?
The Kaiser Family Foundation reported in October 2018 that the annual premium for employer-sponsored family health coverage reached $19,616 last year, up five percent from 2017. Workers, on average, paid $5,547 toward the cost of their family coverage. Fifty-six percent of small firms and 98 percent of large firms offered health benefits to at least some of their workers in 2018.
Q3. Employer Question: What are the different types of Health Insurance plans available?
There are a handful of Health Insurance options available in the market today, including:
- Preferred Provider Organization (PPO) plans;
- Health Maintenance Organization (HMO) plans;
- Point of Service (POS) plans;
- Exclusive Provider Organization (EPO) plans;
- Health Care Service Plans (HSPs);
- High Deductible Health Plans (HDHPs), which can include some of the plan types above, and which are often paired with a Health Savings Account (HSA).
Each plan offers different pricing and advantages for members. For more information, check out Word & Brown’s Quick Flicks video series on YouTube, or visit HealthCare.gov. Not all carriers offer all of the above plan types in all markets.
Q4. Employer Question: What is more important to employees – lower deductibles, lower premiums, or better benefits?
Answer: There is no easy answer here. Each employee has his or her own preferences, health care needs, and budget. Some employees who rarely visit the doctor may prefer a Silver metal tier HMO because it’s more affordable and includes the hospitals they are looking for. Older employees may prefer a Gold PPO because it includes the specialists they want for a chronic health condition (like asthma, high cholesterol, or high blood pressure). What many employers find works best is offering a private health care exchange, which gives employees more choice while still helping employers control costs using Defined Contribution. Ask your General Agent what public or private exchanges might be available in your local market.
Q5. Employee Question: Do I have to enroll in my employer’s Health Insurance plan?
Answer: No, if an employee does not want to sign up for his or her new employer’s health coverage, there’s no requirement to do so; however, if the employee has COBRA coverage, he or she may be ineligible to maintain it if new coverage is available. Likewise, if the employee is married and covered under a spouse’s plan, his or her coverage could be subject to cancellation based on the spouse’s employer plan rules. Some employers do not allow spouse coverage if the spouse is eligible for his or her own insurance through another employer.
Q6. Employee Question: Is there a waiting period before I can get Health Insurance?
Most businesses do have a waiting period before new employees are eligible to enroll in an employer-sponsored health plan. It may be two weeks or one month (with coverage beginning on the first of the month after the waiting period). For example, if a business has a month-long waiting period before an employee is eligible, and coverage begins on the first of the month after meeting the waiting period, then an employee who starts on January 10 would could enroll on February 10, and his or her coverage would begin on March 1. Employees without Health Insurance may want to consider short-term health coverage while waiting for new employer-sponsored coverage to begin.
Q7. Employee Question: Can I go to any doctor under my health plan?
Answer: That depends on the employee’s health insurance plan type. HMOs and EPOs (Exclusive Provider Organizations), typically, do not offer benefits outside of their plan networks (except in case of emergency). PPOs offer enhanced benefits if a member goes to an in-network provider, but usually offer a reduced benefit when members go out-of-network. Plans vary, so it is important for members (both employees and dependents) to know in advance what is covered… and where.
Help with Other Questions
Brokers working with Word & Brown can count on our Account Management team to deliver answers to health plan questions, compliance inquiries, and much more. If you are not already one of our partners, visit our new broker web page, or contact any of our six regional offices in California and Nevada.