The two basic types of small business health plans are the indemnity coverage and the managed care plan. Under indemnity coverage, the employee gets a lot of freedom to move across networks and even out of them. And the coverage is comprehensive. But it is much more expensive than the managed care plan. Under managed care, you will be narrowed down to a certain network of health care facilities and there will be penalties for going outside the network. And the co-pay will also be high under managed care. But overall, it will cost a lot lesser than indemnity coverage.

In Texas, a business will qualify for group health insurance coverage if it has a workforce between 2 to 50 individuals. And all of them need to be eligible for the policy. The full time definition in Texas is a person who works more than 30 hours a week. Texas health insurance is to be extended to all the dependents of the said employee by law.

Texas group health insurance may also require that at least 75% of the employees in a company agree to join the policy. If there are just two members in the company, that is the owner and his wife, then both of them have to own separate policies. They cannot depend on each other for their coverage.

Texas group health insurance differs in its rules for small businesses and larger businesses. Steps were taken by the regulatory bodies to ensure that smaller business is helped given their inherent weakness due to size.  There are specific criteria that each and every employee must meet in order to be eligible for a group policy. There is a limit on the annual rate increase for small business owners in Texas. This ensures that the insurance companies do not charge obscene rates of premium due to a sudden financial crisis. And no employee can be forced or coerced in to joining the group plan, at the same time no employee is to discriminated based on age, current health condition or any other adverse medical history.

The four main types of coverage options available to the individual in Texas are, health maintenance organization (HMO), Preferred provider organization (PPO), Point of service (POS) and individual coverage. The PPO’s are the most expensive after individual coverage. The HMO’s are the cheapest of the lot, but they can all be made affordable if the deal is properly negotiated and differences are ironed out. A fifth option is Health savings account (HSA) which can be run concurrently with any of the above plans.

The cheapest option for a small business health insurance policy would be to go with a high deductible health maintenance organization or HMO. But the main drawback with this policy is that there is not much flexibility. The employees have to visit health care facilities which are listed within a network. And they will not be reimbursed for visiting other clinics or hospitals. Employees will also be required to make a small copayment at the time of receiving treatment. This can vary from 10$ to 20$ when the premium is around 200$ per month.

And if the employee needs to visit a specialist, he will need to get written permission from his primary care physician authorizing the visit. If not, he will not receive reimbursement for that visit.

On the other hand a Texas group insurance policy which follows the preferred provider organization route will have much more flexibility. But obviously, the cost will be a little more than an HMO. Under such a plan the employee does not need to take prior permission from his primary care physician if he needs to go to a specialist. And the network is much wider compared to a HMO. But there will be a higher out of pocket expenditure for all the flexibility that the employee enjoys. The premium under this option could range from 200 to 350$ a month. However, if you had a much lower deductible your premium could come up to around 500$.

A point of service option is a midway type of policy. Again, you will be assigned a primary care physician who will be in charge of all your medical needs. If and when you need a specialist, you will have to take his written consent to do so. A POS option could set you down around 400$ per month.

Individual coverage may be the only option available to some employees. An individual coverage option is not that cost effective compared to the aforementioned three types of policies. And the benefits available in such an option are also not that attractive. Hence it is better to have an HSA or health savings account in tandem with your policy. An HSA is not a conventional insurance policy. It is more of a savings account which will enable you to pay your hefty deductible amount from out of your pocket in case the need arises.

It works like a public provident fund. You and your employer will keep putting a fixed amount every month or year. And you are not allowed to withdraw from the account unless it is a medical emergency. However, if you do you will have to pay a penalty fee. You can withdraw a lump some once you reach the age of 65 though.

After reviewing all your options you will be given a contract to sign. You will have to make a fast decision and submit the contract to the insurance company. The deal that you have got may not last for a long time; usually it is a thirty day period after which new deals come about. Hence you need to act fast.

Conveying the information to your employees,

Once you have sealed the deal, you need to inform your employees about what actions you have taken. When you are taking the decision, try to involve at least a few of the top management. This makes them feel like they are being kept inside the loop and also it will improve employee satisfaction. Then you need to inform all the employees through either pamphlets or public announcement about what is being offered like,

What are the various options? You need to let them know what is on offer. What is the premium amount that they have to pay and also what is the co-pay percentage that will have to be borne out of their pocket.

How it works. Make sure that the employees know exactly how the system works. This will save both you and the employee a lot of time and money. Use your human resources manager to convey the nitty gritty of the policy to all the employees.

Enrollment and usage issues. Enrollment and the coverage period will be different. You need to let everyone know the exact dates from which the coverage begins and when they need to pay their premiums. But if you are going to cut the premium cost at the source from the paycheck, it’s much simpler.

How much will it cost? Make it clear to everybody as to how much the health insurance policy is going to cost per employee per month. You also need to let them know what percentage is being borne by the organization. Try to lay the groundwork for cost sharing at the beginning itself so that there is no confusion in the future.

How can they waive their coverage? Some members of your company may not want to be a part of the health plan that you are offering. This may be due to varied reasons, some may have coverage through a spouse or may already have a plan, or some may not be able to afford such a plan. You will need to convey to them about how they can refrain from enlisting in the plan.

Age of the group, it is reasonable to expect older members to be more susceptible to health problems. And hence we can logically conclude that they are going to be a lot costlier to the insurance company.

Gender. Females generally incur higher health care costs. And the costs are higher for younger females, usually during the child bearing ages. And then it gradually starts diminishing until it becomes lesser than that of men after the age of 50. If your group has a larger younger female workforce or a huge older men population, you can expect to pay higher premiums.

Number of members in the plan. The insurance providers generally provider lower premium rates for larger groups. This is because of a number of reasons. Firstly the administrative costs per employee with more employees. Secondly, a larger group cannot tailor make their policy to their benefit. The cost factor will not be more than 20% of the plan cost.

Type of industry. Some industries are inherently high risk. This could be due to the working conditions or stress associated with the type of work. The factor can weigh to about 15% of the cost.

Geographic location. The health care costs vary according to the region in which the insurance holder resides. This could be due to climatic conditions, pollution levels, life style etc. the insurance providers will vary the cost based on the zip code that you provide for your business.

The rating process for a small business is two fold. First the insurance company will decide the baseline price of the policy. For this they will study the case characteristics and plan design without regard to the health factors. Next they will adjust the rates to reflect the health status factors. But this adjustment must apply to all the member of the group uniformly and must not be more than 67% of the baseline price.

Some small businesses may not be able to afford the costs of a group health insurance policy. In such cases, you can try to offer individual health insurance coverage quotes to each of your employees with a view to improve retention and morale without burning a hole through your pocket.

According to the Texas department of insurance, all insurance providers are allowed to review past and present medical records of their applicants. And based on the whatever they find out from these records, they will be within their rights to provide insurance coverage with modified clauses or attach an elimination rider or even deny coverage altogether.  When the insurance company is issuing a non-HMO insurance policy, to individuals who lack any prior verifiable coverage the state of Texas permits a 60 month look back period. And besides this they are also eligible for a 24month exclusionary period limit on all the pre existing conditions. All types of elimination riders are allowed to be used in tandem with the policy irrespective of it being HMO or non HMO. However HMO plans are exempted from using pre existing condition exclusionary periods.

One more discerning character of the Texas system is that grandparents are allowed to add their grandchildren as dependents as long as the said children are residing with them and are under the age of 25.

There is also the guarantee issue basis which was enacted in the health insurance portability and accountability act of 1996. According to this act, all employees are guaranteed coverage irrespective of their past or present medical condition. Insurance providers are allowed to charge varying premiums to different small groups under different criteria. However, the difference in costs must not be more than 25% of the base line price.  Small groups are also guaranteed renewal. This means that the insurance company cannot deny a renewal by citing a reason that there were too many claims. But they can increase the rates by a maximum of 10% every year.

Groups with more than 20 employees can come under the COBRA regulations. It states that a departing employee can stay on the group for a period of 18 months after leaving the group.  He or she is eligible to be covered under this regulation in all cases unless he or she was terminated for gross misconduct.

There is also a mini COBRA regulation which is applicable to groups with less than 20 members. The departing member can retain the policy for 6 months after leaving. But he or she has to pay for the premium and also a 2% administrative cost over the premium. An extension of 6 months can be sought if the person has failed to furnish a policy for himself. And after this the Texas department of insurance assures all individuals under COBRA of guarantee insurance if he or she applies for it.

To compare small business health insurance quotes, visit Insuriffic.com.

Purchasing alliances are a great option to get a wider choice out of a lot less money. They offer a range of insurance products from different insurance companies under one roof. But you will end up paying a single premium for the entire range. The choices you get would be a wider medical care network, better health care facilities, lower co-pay etc. the main difference in a purchasing alliance is that all the employees do not pay the same amount towards their premium every month. An employee with a HMO option would pay a lot more than one with a PPO option. This is because the employer pays a fixed amount per employee per month irrespective of the plan that they have chosen. But you have to remember that though there are added benefits through a purchasing alliance, the overall cost might not be lesser than getting a policy directly from an insurance company.

The alliance will generally give you access to a health plan administrator that will handle many service issues for the alliances members. The alliance is basically a good source of information also about various plans, benefits and details about services.

You can also consider trade and professional associations while shopping for group health insurance coverage. These associations will help out their own in getting a good policy. But there is one thing that you will need to remember when trying to purchase a policy through an association; you will most likely have to approach them yourself. This is because most brokers will not know much about all the trade associations. They will be more in to regular insurance companies and alliances. You will be in a better position to approach your trade association considering that you would already be acquainted with them. And besides each association will have some sort of arrangement with brokers by which they will get incentives for referring them and your broker may not really have any incentive to seek them out for you. But do keep in mind that going with a trade alliance is a good step since you are contacting an organization in your field. And these associations are generally not for profit and hence will not be out to swindle you of your money.  But first, find small business health insurance quotes online.

What is the difference between a broker and an agent?

Both these guys are technically called insurance agents in California. But the difference is that a broker will help you choose your insurance plan from a range of companies. He does not work for any particular company at least that is what we hope for. And the agent is someone who promotes the products or services of just one insurance company.

Now we come to the question of what will the broker do?

The broker is a person who will help you find the right plan. He will help you formulate your budget and then make a decision. he will also help you service the account in future by helping you with billing, claims and payments. He will do all the legwork for you and hence save you a lot of time, which in your case would definitely mean money given your status as a business owner. He will also assist in your renewal process.

Broker commissions & fees

The brokers accept commissions from you as a percentage of the annual premium. It is not clear whether all brokers accept commissions from the insurance companies, as this would be a conflict of interest with their line of work. But you will need to find a dependable broker who will not accept such commissions. Try contacting friends or family or friendly business associates who can refer you to a good one. So apart from the commission, the brokers will also accept some fees for other extra work. This could include a lot of things like copying, legal processing, data collection etc. you will need to check with them before assigning any work.

Finding the broker

As mentioned before, the best way to get a broker is through a reference. But if you do not get one, the next best thing to do is to look online. There are a couple of online brokers too. You need to clarify the exact dollar amount that you are talking about. You will also need to iron out the differences regarding services that he will render to you. It is very much necessary that you do not feel apprehensive about seeming rude at this juncture. You need to be straightforward and make sure that nothing is left unsaid. This is very much necessary to ensure that the future is trouble free.

Even before you find a group health insurance broker for California, you should go online and search for group health insurance quotes.

The range of coverage

Early on you need to decide what sort of scope you are looking for in your coverage, whether you are going to be shopping for limited or broad coverage. If you are going for a basic coverage, the employees will obviously have to shell out a lot more whenever they go for their check up. But if you are going for a more comprehensive plan, the out of pocket expenditure will be minimum. You also need to decide the deductible amount that each of your employees have to pay. It’s even better if the insurance company allows you to have variable deductibles for each employee.

Choice of care providers

When you are deciding on your group insurance policy, the choice of providers offered is of utmost importance. The network of providers needs to be at a close proximity to the office or the residences of all your employees. And also some employees would already be well acquainted with a doctor and would not prefer to leave him or her. And it is these very employees that you want to retain given their years of experience. Try to buy alliances which will help you exchange networks with other groups.

Cost sharing with the employee

You will also need to decide what portion of the bills you are going to pay. There are two ways in which you can make a contribution. One, you can pay a portion of the premium every month. In fact it is required by the insurer that you pay anything above and beyond 50% of the premium amount per employee per month. Another way of contributing is to pay a portion of the co-pay. Whenever an employee visits the doctor, he would furnish the bills to you and you will have to pay an agreed portion of the co-pay.

Coverage rules and regulations

There is a lot of nitty-gritty associated with coverage rules. And the problem is that once you begin to understand them, you need to differentiate between the hard and fast rules and the options. For example, you need to figure out whether you want to provide coverage for unmarried domestic partners. If you do, then you will need to furnish an affidavit for such individuals stating that they are indeed cohabiting a house. And it gets really murky when trying to get the insurance company to pay up for such cases.

And of course, please check online insurance quotes before buying any policy.

What is the overall value of the plan? You need to compare the coverage with the cost of the premium amount that you will be paying. But do remember that higher deductibles are not a way of reducing the premium and forgetting about it.

Choice of providers, this refers to the range of health care centers that your employees can visit. What is the location of such health care facilities? How good are they? You will have to make sure that these health care facilities or clinics are either near your office or near the region where most of your employees reside. And you will also need to find out what sort of penalties or out of pocket costs the employees will have to bear if they go to a clinic outside the network.

The quality of the insurance company, you need to know if your insurance company is reliable. Has it been around for a long time? is it a big name or is it one of the small players? The best way to verify the quality of the insurance company is to read reputed ratings lists which will show you where that particular insurance company stands in the balance sheet arena.

You need to try and balance out the benefits and the costs. Apart from just looking at the figures, you have to start looking at benefits that might apply to your employee base rather than to the general populace. Things like coverage for prescription drugs are tricky. You need to know whether you will be covered for both generic drugs and name brand drugs and if not what cost you will have to bear out of your pocket. Behavioral health coverage in California is a bit complicated. According to California’s mental health parity law, certain mental illnesses cannot be charged higher premiums or extra out of pocket payments. You need to be clear about which conditions are supported by your policy. There is also something called the annual out of pocket maximum. If any of your employee reaches a certain preordained maximum, he or she does not need to pay any co-pay for the rest of the year. These predetermined maximums have been increasing over the years, but it is comforting to know that no matter what sort of medical emergency you are facing, there is a certain limit beyond which you will not have to pay anything.

Plus, you should always compare group health insurance prices before making the decision to purchase.

A group coverage plan will require the payment to be shared by both the employer and the employee. A typical group coverage plan in California will cost around 3100$ per employee. But before you jump, do realize that it has to shared between the employer and the employee.

Out of this cost, the employer has to pay around 50 to 80%. However there are some insurance plans which allow the employer to pay as little as 25% also. The estimate given above is an average number. There will be a lot of health plans for much lesser and much greater cost than what was mentioned. And last but not the least, whatever the employer pays as premium as tax deductible. Normally health care costs in an average business are around 10% of business cost.

Normally, an employer should set aside around 1500$ to 2500$ per employee, per year. But do remember that smaller business will get charged a lot more for their insurance coverage. This includes all those employers with less than 5 employees. And in such cases you need to increase the aforementioned figures by 10%.  And also do remember that the premium cost of each employee will increase by 10% every year for at least 3 years.

Apart from the direct costs associated with health care, there are other costs too. There is a need for a large amount of paper work and administration. All this will usually be handled by the human resources department. The general work would include adding/removing family members from the policy,(due to deaths, marriage, child birth etc), filing insurance claims on behalf of employees, paying insurance premiums on behalf of employees. And sometimes brokers offer such services. But you need to keep in mind that if you do have a talented workforce, you can do it yourself for a much lesser cost.

Now we come to the cost of the plan itself. Broadly speaking you have two options. You can either go with a HMO (health maintenance organization) or a PPO (Preferred provider organization). HMO’s offer much less flexibility compared to the PPO. But they are much cheaper too. In HMO, you will be asked to select a primary care physician (PCP) who will refer you to other specialists if and only if you need special care. But with a PPO, you are given the freedom to use your discretion to decide whether you want to venture outside your network.

And of course, you should compare quotes online for small business insurance before purchasing.