Group Health Insurance FAQs

What are the coverage requirements for small employer plans?
As it stands right now, small employers are not required to offer coverage to their employees. However, if an employer chooses to offer group health insurance, the plan offered must meet certain requirements as dictated by the Affordable Care Act and insurance companies are not allowed to reject anyone based on their health status. (This is known as ‘guaranteed issue.’)

How are premium rates determined for small group employers?
The Affordable Care Act has significantly altered how premium rates are now determined. However, rates are still based on limited factors, such as age, geography, and smoker status.

What are the coverage requirements for large employer groups?
It is now illegal for an insurance company to refuse to insure a large employer group of employees based on their health statuses. Insurance companies also cannot exclude an individual employee from the group insurance plan based on medical history. Additionally, it is the law that large employer group insurance be renewed every year, unless the employer chooses not to renew with that particular insurance company, the employer doesn’t pay the premium, the employer has committed fraud or intentional misrepresentation, or the employer has not complied with the terms of the contract.

How are premium rates determined for large employer groups?
Rates are based on employee participation and the employer group’s prior claims experience, if applicable. It’s rare for members of a large employer group to complete a medical questionnaire before coverage is obtained.

Who regulates employer group health insurance plans?
The states regulate fully insured group plans, and the federal government now has more authority over larger group health insurance plans due to the implementation of the Affordable Care Act.

Is employer group health insurance available to sole proprietors?
Most states require that companies employee at least two people in order to qualify for a group health insurance plan. The Affordable Care Act has eliminated the designation “business group of one”, which was previously the designation for a sole proprietor seeking health coverage. Sole proprietors are now directed to apply for individual healthcare coverage.

What rights do I have if I lose access to my employer group health insurance coverage?
A job change, a job loss, and divorce are some of the reasons that you could lose your group health insurance. Most people are able to retain their insurance through COBRA, or the Consolidated Omnibus Budget Reconciliation Act. However, not all employers utilize COBRA, thus not everyone is covered. Some states have alternative continuation-of-coverage options. Additionally, the Affordable Care Act has now made it possible for individuals to obtain their own healthcare coverage, so losing your employer-sponsored insurance does not mean that you will necessarily go without insurance until you receive benefits through your next job.