At the workplace, employees play a vital role in an organization’s success. Employer contributions should keep employees healthy and safe, allowing them to remain productive, engaged, and increase morale and candidate quality.
One of the best ways to do this is by offering group health insurance plans. But what type of health insurance coverage does your business require? Here’s where small group vs large group health insurance comes into play.
Not sure what large group vs small group health insurance is or the need or the benefits of each type of insurance? Well, this article will all the questions you have and more. Keep reading.
What Is Small Group Vs Large Group Health Insurance?
As the name suggests, large group vs small group health insurance refers to the group health insurance for employees based on the size of a business.
How To Determine Group Size?
Group size is a deciding factor in group health insurance for businesses.
You can determine the size of your group by the number of full-time employees. Typically, full-time employees work 30 hours or more per week or 120-hours per month, and part-time employees work fewer than 30 hours per week.
You must include the following types of employees in your calculator:
- The total number of employees in your organization, including those in sibling, subsidiary, and parent companies
- Include full-time, part-time, and seasonal employees
Check this out: If you’re looking for group health insurance for small business owners, you can read more about who is eligible for group health insurance here.
What Is Small Group Health Insurance?
Small group health insurance plans are a type of group health insurance for employees of a small group, i.e. up to 50 full-time employees.
How To Get Group Health Insurance For Small Businesses?
So, how can a small business get group health insurance? The small group health insurance participation requirements for your organization to qualifies for group health insurance are as follows:
- Your business must comprise 2 to 50 full-time employees
- Meet the minimum participation requirements set forth by the insurance company
In the case of part-time employees, it’s slightly more complex. You will need to convert each part-time employee's hours to full-time equivalent employees based on the 30-hour threshold.
Find out if you meet all the small group health insurance requirements by reading more about employer group health insurance requirements.
What Is Large Group Health Insurance?
Like small business health insurance, large group health insurance is coverage for employees in a large organization, i.e. with 51 or more full-time employees.
How Can You Qualify For Large Group Insurance?
The participation requirements for your organization to qualify for large group health insurance are as follows:
- Your business must consist of 51 or more full-time employees
- Meet the minimum participation requirements set forth by the insurance company
As for part-time employees, the same as a small group applies to large groups as well.
How Do You Purchase And Enroll In A Small Or Large Group Health Insurance Plans?
If you meet the participation requirements, you can apply for group health plans for your small or large business. You can do so by:
- Directly approaching an insurance provider
- Purchasing a plan through a broker
Unlike individual health plans, group health insurance doesn’t come with an open enrollment period. Meaning, you can enroll in a plan when you’re ready to sign up for one.
After enrolment, your premiums are locked in for a year. During this time, you can add or delete employees and dependents at any time, but premiums remain unchanged until the end of the plan year.
At the end of the plan year, you can either renew your existing plan or shop for a new one.
What Does A Small And Large Group Health Insurance Plan Cover?
Typically, the coverage for group health insurance includes the following. However, it can vary from insurer to insurer. It’s best to check the policy documents or speak with the insurer to understand your coverage.
- Pre and post hospitalization charges
- Maternity and newborn care
- Ambulatory services
- Preventive health care
- Lab tests
- Prescription drugs
How Much Does A Group Health Insurance Plan Cost?
Whether small or large, when you’re looking for small group health insurance quotes, several factors affect the cost of group health insurance for small businesses and large, most of them aren’t within your control. Irrespective, if you have some understanding of these factors, you can make an informed decision.
- Age - A critical factor that determines how much you pay for your group health insurance is age. The rule of thumb for insurance providers is the higher the age, the higher the premium. The reason is, older people are more likely to undergo illnesses as compared to youngsters. If you’re looking for comprehensive coverage with excellent benefits at budget-friendly prices, it’s best to buy health insurance for your business as early as possible.
- Occupation - The nature of work affects the cost of premiums. Work environments like a factory or construction site typically bear higher premiums as compared to jobs in a school. This is because of the risk factors involved and the high injury rate.
- Employer size - As you know, there are small and large group health plans. Since large groups have more employees, the premiums are usually lower than compared to a smaller group.
- Policy tenure - Simply put, the longer the duration of your plan, the lower the premium and vice versa.
Like this, there are a few more factors that are taken into account when you seek group health insurance quotes for small businesses or large ones.
Find the detailed list on this post - how are group health insurance premiums calculated?
Differences Between Small Group Vs Large Group Health Insurance:
Both small vs large group health insurance have a few differences. One of the most obvious is the size of coverage options. Small group health insurance is for smaller groups and large group insurance is for larger groups.
Besides this, the price is another major difference. If you fall under the small group category, your premiums are slightly higher, as you have fewer employees. The premiums paid by large employers are comparatively lower for larger groups. Again, this can differ from insurer to insurer.
These are the primary differences. Beyond this, there are some different rules and regulations that each insurer follows. When you’re ready to purchase your plan, you can have a discussion and clear any queries.
Do You Have To Offer A Small Or Large Group Health Insurance Plan?
Since April 2020, the Indian government has made it mandatory for employers to provide group health insurance to employees.
Are you wondering why group health insurance is mandatory? Check this post out for the answer!
What Are The Benefits Of Small And Large Group Health Insurance?
As a small business owner, it’s good to know the group health benefits for small business.
- Tax benefits - As a small business, if you incur costs related to health insurance, they’re deemed as a business expense and the premiums are tax-deductible. In case you’re an employee who is paying the premiums, you can read more about the terms, conditions, and deduction amount in this blog about premiums and tax.
- Improve hiring and recruiting - Whether new hires or current employees, good benefits make a robust package that’s desirable. This will set your organization apart from the competition.
- Foster a healthy company culture - Offering health coverage along with wellness benefits shows you care about your employees. You’re also promoting a positive culture that will help your employees and business go to the next level.
- Healthier, productive employees - A group health insurance policy ensures employees are on top of their health and take fewer sick leaves. The fewer leaves and better health results in improved morale and focus, which leads to better productivity.
Rather than wondering, start reading about the umpteen benefits of group health insurance and sign up for one today!
How We Can Help?
Offering health benefits for your business is an impressive milestone for your organization. When you do it right, by exploring and understanding the different options and making an informed decision it will give you the desired results.
Loop understands your business is unique and so are your requirements. We will work with you and help you design a customized group health insurance plan tailored to the unique needs of your business and employees of your small or large group.
Get group health insurance plans starting from Rs. 499 along with a host of added benefits by signing up or calling us!