Cost for Group Insurance Plan
For many people who run small business units, the cost of group health insurance plan is a major challenge. The good news is that this plan is not as expensive as it is assumed to be. Let us a take a look at the documentation needed, administration and cost of the group health insurance plan.
Cost of a typical health insurance plan
The fact the employees pay 50% of the total monthly premium amount should be borne in mind before calculating the average costs for the health insurance plans. Hence, while explaining the details, understand whether it stands for contribution by the employer or the total amount for the policy.
The average cost for one employee was $3100 in the year 2003. However, before you go into shock, understand the following points.
- The cost mentioned above is the total cost inclusive of contributions from the employee and the employer. Most companies split the cost of premium evenly between both parties – employer and employee. One of the new plans out in the market today, permits the employers to contribute as little as only 25% towards the health insurance for employees. In order to assess all your options, don’t hesitate to contact a good insurance agent.
- There are many health plans that either cost more or less than the cost mentioned above which is just an average.
- And most importantly, the contribution of the employer is 100% tax deductible under the category of business expense.
The cost you might incur
A budget in the range of $1600 to $2500 per employee annually should be an optimum cost irrespective of the coverage opted for.
Documentation and Administration of paperwork
A strategy for saving tax should be in place before you sponsor group health insurance plan for your employees. In addition to the cost of cash spent in buying the policy, you should also take into consideration the money and time you will have to invest in managing the health insurance plan.
When does employee relations management and documentation gain focus?
- At the onset when introducing your employees to the health insurance plan
- Once each year when the policy comes up for renewal
- When changes occur in the following areas:
- Editing the details of family members and employees
- Payment of premium
- Handling issues related to claims, billing and eligibility
- Handling payroll data effectively reflect contribution of the employee as on date and receiving contributions from them for premium payment purposes.
- Handling documentation for new recruits and ex-employees
It is important to be aware that these services are not provided by insurance agents. You will have to clearly specify the administrative duties that come under your purview and those that will need to be handled by your insurance agent.
Obtain insurance quotes for group health policies and see which one works the best for you before purchasing it.