Small group insurance plans are designed to provide health coverage to employees of small businesses. These plans are subject to certain requirements that aim to ensure fair and comprehensive coverage for employees. Below are some of the key requirements for small group health insurance plans:
The number of employees in a group typically defines a small group. In the United States, this is commonly defined as a group with 1 to 50 employees. However, this number may vary by state and can sometimes include up to 100 employees.
Many states require a certain percentage of eligible employees to participate in the small group health plan. This is to prevent adverse selection, where only employees with higher healthcare needs opt into the plan.
Employers are generally required to contribute a minimum percentage of the premium cost for their employees. The specific contribution percentage can vary by state and plan.
Small group health insurance plans are typically “guaranteed issue,” which means that eligible employees cannot be denied coverage based on their health status or pre-existing conditions.
Essential Health Benefits:
Small group health insurance plans must provide essential health benefits as defined by the Affordable Care Act (ACA). These benefits include items like preventive services, prescription drugs, and maternity care.
Coverage for Dependent Children:
Small group plans must offer coverage for dependent children up to a certain age, typically up to 26 years, regardless of their marital or student status.
Small group plans must have annual out-of-pocket maximums to limit the amount employees are required to pay for covered services in a plan year.
Minimum Value and Affordability:
Plans must meet minimum value and affordability requirements under the ACA. This means that the plan should cover at least 60% of the total allowed costs and be considered affordable for employees.
It’s important to note that specific requirements and regulations can vary by state, and the rules may change over time. Therefore, businesses considering offering small group health insurance should consult with an insurance broker or an expert in the field to ensure compliance with all applicable laws and regulations.