There is a special one-month open enrollment period for small group health plan sponsors that might not otherwise meet minimum participation or contribution requirements. It is a little-known window of time that could save you money and secure better health care coverage for you, your family and your employees.
What are the benefits to Small Group plans versus Individual Market plans?
There are many advantages of enrolling in the Virginia small group market versus the Virginia individual market including the following:
- Lower Premiums – In almost all areas of VA, small group market premiums are lower than individual market premiums. Savings on premiums can be as much as 40% or higher depending on the area and whether subsidies are in play. In fact, individual market premiums are on average 70% higher in Roanoke and Richmond.
- Larger Plan and Carrier Selection – The number and quality of plans in the VA Small Group market far exceeds those available in the VA individual market. For example, in 2020, Anthem only offers 5-6 plans in the individual market as opposed to 60+ in the small group market. HMO plans are only available in the Anthem individual market, but they offer PPO and POS plans in the small group market. Furthermore, the lowest deductible available in the individual market is currently $1000+ whereas there are plans in the small group market with no deductible at all. There are also areas in VA where only one carrier is available in the individual market whereas most areas in small group Market VA have 2-4 carriers available. We don’t have 2021 data yet, but we anticipate it to be very similar.
- Risk Reduction of Potential Penalties and/or Fines – Some employers may try to think of creative ways to offer their employees reimbursement for healthcare premiums and expenses; however, many of these methods may be out of compliance with regulatory guidelines. Sponsoring a group health plan is a proper way to provide health insurance benefits to your employees.
- Tax Advantages – Group health insurance premiums and/or contributions may be 100% tax deductible as a business expense for employers. In addition, the employee’s portion of the premiums may be taken out on a pre-tax basis with a simple type of 125 Cafeteria plan. Consult with your CPA for additional information.
- Employee Retention - Offering a comprehensive health insurance plan shows that you care about your employees’ overall well-being and can be used to attract and retain valuable employees. With regular access to preventive care, group coverage is an easy way to keep your employees happy, healthy and productive at work.
- Greater Market Stability – Since healthcare reform, there have been fewer changes to small group rates and plans than in the individual market. This means that renewing your plan from year to year is easier with group plans.
Who is Eligible to Enroll in a Small Group Plan?
Business owners with at least one full-time W2 employee (in addition to the owner) may be eligible for group plans. In addition, Sole Proprietorships may be eligible for coverage thanks to Virginia legislation passed on July 1, 2018.
What are the Advantages to Enrolling During the Special Annual Open Enrollment Time?
Eligible small groups can start a group plan at any time during the year, but there are participation and contribution requirements that must be met. Most carriers require that 75% of full-time eligible employees must participate in small group plans, minus qualified waivers. In addition, every carrier requires that employers pay at least 50% of the premium for their employees. These requirements may be difficult for a small employer to meet due to employees not wanting to enroll and the cost of paying for the employee premiums.
During this special time once a year, employers can enroll in a group plan regardless of who chooses to enroll and pay nothing towards the employee’s premiums. In other words, if only one person chooses to enroll in the plan, you can still reap the benefits of enrolling in the small group market.
This enrollment period is for January 1st only and all paperwork must be submitted between November 15 and December 15.
R.K. Tongue is here to help you explore your group health insurance options today. If you are interested in exploring your group health options for your small business, please contact Melanie Nowak on our Benefits Team today for additional information via email mnowak@rktongue.com or phone at 410-752-4008.
Caroline Cole started with R.K. Tongue Co., Inc. in 2007 with a primary goal of growing the Employee Benefits Division in the Professional Markets Group. Since then, she has been dedicated to offering her clients unprecedented knowledge and expertise as well as superior customer service. With the cost of medical insurance at an all-time high, she realizes that offering a quality benefits program at an affordable price is a challenge for employers. She is committed to that challenge by staying informed of all available products/plans in addition to thinking “outside the box” to find creative solutions that make sense for her clients. Caroline also attends regular training on healthcare reform to ensure that she is up to date on all the latest changes and how they affect her clients. She is an active member of the National Association of Health Underwriters.