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Utah Group Health Insurance

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Group Health Insurance Information

Our responses apply to small groups (50 or fewer employees) in most US states. Please verify all information here with your State Insurance Department.

How many employees are required to qualify for group health insurance coverage?
You need at least two full-time employees. However, health insurance companies take a very skeptical view of two employee groups in which the two employees are husband and wife.

How many employees have to enroll in the group health plan?
As a general rule, at least 75% of eligible full-time employees must enroll in the plan or document they have group coverage through a spouse. At least 50% of all eligible employees must actually enroll in the group plan. No participation requirements apply to dependents.

Can part-time employees enroll in the group plan?
Health insurance companies will cover only full-time employees.

How do insurance companies define "full-time employee?
A full-time employee is generally defined as an employee working 30 or more hours per week. Some insurance companies may provide a little flexibility on this issue.

How much of the group health premium does the employer have to pay?
As a general rule, the employer must fund at least 50% of the employee health insurance premium. The employer is not required to fund any portion of the dependent health insurance cost.

How long does it take to obtain group health insurance?
After submitting enrollment materials, it will take, under the best circumstances, about two weeks for the health insurance company to review and approve the group application. The process often requires additional time, though rarely longer than a month. It is best to submit the group application as early as possible.

What documentation is required to qualify for group health insurance?
This depends on the structure of your business. If you have employees, you will typically need to provide a copy of your most recent quarterly unemployment insurance report. Some health insurance companies will consider payroll records to be sufficient documentation of employment.

For partnerships or other organizations in which workers are not paid taxable wages, you may need to provide a business license, articles of incorporation or other documents verifying the legitimacy of your business.

My business currently provides group health insurance coverage. Will a replacement group health plan apply pre-existing condition exclusions?
In most circumstances the answer is NO: If an employee has satisfied the pre-existing condition limitation waiting period under the previous group plan, that employee will not have to re-satisfy the pre-existing condition exclusion waiting period under the replacement plan.

My business does not have a group health plan. If a group health insurance plan is introduced, will pre-existing conditions exclusions be applied?
Unless an employee has qualifying pr group coverage that has ended no more than 62 days prior to the introduction of the new group plan, that employee will have to satisfy the full pre-existing condition exclusion waiting period under the newly introduced group plan.

Does group health insurance costs less than individual health insurance?
No. Individual health insurance is usually less expensive. However, individual health insurance policies have disadvantages, such as less healthy people being rejected.

What is the definition of "pre-existing condition?"
Each insurance company has its own definition. However, the following wording is consistent with most health insurance company provisions: "A pre-existing condition is a medical condition that would cause a normally prudent person to seek treatment during the twelve months prior to the beginning of coverage."

What is the pre-existing condition exclusion rule for pregnancy?
Under group plans, pregnancy is NOT subject to a pre-existing condition exclusion. This is federal law. The rule applies equally to new and current employees.

Can a group health insurance application be rejected?
a group cannot be denied group coverage for medical reasons. However, a group application can be rejected if the applying organization does not meet the insurer's participation and employer contribution requirements.

When does COBRA continuation apply?
COBRA applies to employer groups that averaged 20 or more full-time employees during the previous calendar year, though the wording of this rule can change from year to year.

COBRA compliance regulations apply to the employer -- not to the insurance company. Potential civil and regulatory penalties for COBRA noncompliance can be considerable. We suggest employers should not rely too heavily on insurance agents for COBRA advice. This area of expertise is better suited to attorneys and professional COBRA administrators. COBRA compliance is enforced by the IRS.

Can any group of people organize to purchase group health insurance?
No. An employee-employer relationship is required.

Can independent contractors be insured under a group health plan?
The standard answer is "No," though some group health insurance companies offer limited flexibility on this issue.

Can I save money by working directly with the insurance company?
No. Small group (50 or fewer employees) rates are strictly regulated by the state. In addition, almost all group health insurance companies are not organized to sell directly to small employers. It is more cost effective for these health insurance companies to work through independent agents like MedPlan Access than to hire additional employees.

Is any one group health insurance company really better than another?
A resounding YES. There are big differences in administrative quality, financial stability, benefit choice, network presence and rate competitiveness. Look to a group health insurance professional for guidance.

Can we offer employees a choice of different health insurance plans?
Such options are typically available to groups of 10 or more employees, though a few insurers make such options available for as few as 5 employees.

What are "consumer choice" health insurance plans?
"Consumer Choice" is a marketing buzzword that means giving employees choices of different health plans. See the previous question/answer.

What about Health Savings Account (HSA) plans?
Small employer demand for Health Savings Accounts (HSAs) is quickly gaining momentum. Most health insurers that are not already offering HSA-related products are rapidly developing such offerings. Though HSAs and their accompanying qualified High-Deductible Health Plans (HDHPs) are not for everyone, they merit consideration by most small employers.

We believe HSAs will become a large and permanent part of the US heatlh insurance landscape. This site contains extensive information about Health Savings Accounts (HSAs) and qualified High-Deductible Heatlh Plans (HDHPs).

For how long am I committed to keep a group health insurance plan?
Group health insurance is purchased in one-month increments. However, if you discontinue the plan, notify the insurer. Otherwise, there could be adverse credit reporting consequences.

What is the difference between Blue Cross Blue Shield and other health insurance companies?
There is little difference -- though the Blue Cross Blue Shield franchises in both Illinois and Indiana are large and financially sound health insurance companies. MedPlan Access represents both Blue Cross and Blue Shield of Illinois and Anthem (Indiana) Blue Cross and Blue Shield, and we consider them both quality choices, though not necessarily superior to other fine health insurance companies.

What can one do to minimize group health insurance rate increases?
Take advantage of the competitive group health insurance market in both Illinois and Indiana. MedPlan Access does not advocate change for the sake of change, but we advise our small group clients to think in terms of replacing their group health insurance company every 3-5 years.