The cost of health insurance for employees – by far the single most expensive benefit offered by employers – is one of the greatest challenges many small businesses face today. As business owners know, health insurance is a powerful tool for hiring and keeping the best workers. Businesses with 50 or fewer full-time employees are not required to offer group health
coverage to their employees. Fully-insured group health plans issued in the State of Missouri are regulated by the Missouri Department of Commerce and Insurance. However, if the group health plan is self-insured, Missouri state laws would not be applicable. Most self-funded plans are regulated by the federal Employees Retirement Income Security Act (ERISA) of 1974. A
fully-insured policy is one in which the benefits are purchased from an insurance company. In exchange for the premium it receives, the insurance company assumes the financial risk and responsibility of paying for covered services. Conversely, a self-insured (also referred to as “self-funded”) plan is one in which an employer, not an insurance company, provides benefits. The employer established a plan document outlining the covered expenses, exclusions, and other important terms; pays claims
using its own funds along with any enrollee contributions; and may hire a third party to administer benefits on its behalf. Oftentimes, an employer will utilize an insurance carrier as their third-party administrator. Generally, federal law governs both fully-insured and self-insured plans; however, self-insured plans are not subject to state insurance regulation. There are several types of health insurance plans a small
business owner can purchase. Some plans provide comprehensive major medical coverage, while others provide a very specific, or significantly limited, amount of benefits. The various plans include:
How do I purchase group health insurance for my small business?There are various means by which a small business employer can shop for group health coverage. Some of those include:
Before purchasing, interview several licensed insurance agents who specialize in serving the health insurance needs of small businesses.
In addition to health insurance, what other types of coverage/benefits can I offer my employees?There is a plethora of additional benefits available for small groups such as: dental insurance, long-term care insurance, short-term disability, long-term disability, life insurance, flexible spending arrangements (FSA – cafeteria plans), health savings accounts (HSA), health reimbursement accounts (HRA), vision insurance, etc. The number and type of benefits offered is up to the small business owner. Who qualifies for coverage?Typically, employees working 30 or more hours per week will qualify for coverage under a group’s health plan. However, an employer may offer coverage to an employee working less than 30 hours per week so long as the coverage is being offered to all similarly situated employees. An employer may not discriminate amongst similarly situated employees for any reason, especially for past or current medical issues. How does COBRA and Missouri State Continuation work?The Consolidated Omnibus Budget Reconciliation Act (COBRA) applies to groups with 20 or more full-time employees. COBRA allows a terminated employee the right to continue enrollment under the group health plan for a period of 18 months. The termination can be voluntary or involuntary; however, involuntary termination due to misconduct may negate the employee’s right to COBRA coverage. The employer is responsible for notifying the terminated employee of their COBRA rights within a specified timeframe. Certain qualifying events, such as disability, may allow a terminated employee to extend their COBRA benefits past the 18 month time limit. There are also special provisions for dependents/spouses of terminated employees based on the reason(s) for loss of coverage (i.e. death, divorce, etc.). More information on COBRA is available by visiting the US Department of Labor website. Missouri State Continuation applies to groups with less than 20 full-time employees. State Continuation mirrors, for the most part, federal COBRA. The specific provisions for State Continuation are outlined under Section 376.428 RSMo. Beware of “alternative” types of health insurance – or outright fakesMedical discount plans are not insurance These plans claim to offer discounts for members who use certain doctors, pharmacies and hospitals. Verify these claims with those providers before buying. While these plans are not insurance, they are regulated by the department. Call our Insurance Consumer Hotline to verify the plan is registered as required by Missouri law. Bogus health plans You may see ads on late-night TV, in spam or in junk faxes offering “unbeatable” low prices on group health coverage. Many of these are unlicensed, illegal operations. You can find out if these companies are legitimate with a quick phone call to our department. As with most products, if a deal sounds too good to be true, it probably is. What can I do if I am experiencing issues with an insurance carrier?Our department is tasked with overseeing the insurance industry in our state. Our goal is to evaluate a carrier or agent’s compliance with policy provisions and Missouri insurance laws. One of the ways we accomplish this goal is through our consumer complaint process. If a consumer is experiencing an issue with an insurance carrier or an insurance agent, and the issue is related to a product or agent subject to state regulation, the consumer may file a complaint with our department. You may file a complaint by downloading our Consumer Complaint Form and returning it to our office, or by filing a complaint online through our website. To file a written or online complaint, or to obtain additional information regarding our complaint process (such as a list of plans we do and do not regulate), click HERE. If your question is of a general nature, or you are seeking some other type of insurance-related assistance, you may contact our Consumer Hotline at 800-726-7390. Back to the Insurance for Small Business page Topics for ConsumersMissouri Department
of Commerce & Insurance Map to Office Do employers have to offer health insurance in Florida?In Florida, all employers with 50 or more full-time employees are required to offer some form of health insurance benefit. Once you have 50 employees, you are considered a large employer. This means that you may face penalties if you do not offer health insurance.
What is required in the Florida Employment health care Access Act?The Florida Health Care Access Act allows small businesses to provide group health insurance coverage for its employees on a guarantee-issue basis regardless of health circumstances, preexisting conditions, or claims history.
What percent of health insurance are employers required to pay Florida?A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
Which act requires employers with more than 50 employees to provide insurance?4980H, added by ACA, requires employers with at least 50 full-time and/or full-time equivalent employees to offer affordable health care coverage that provides a minimum level of coverage, or pay a penalty.
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