How To Make Better Decisions About Small Business Group Health Insurance

There are certain aspects of small business group health insurance that need to be understood by the average consumer before entering the market. It's not necessary for you, the small business owner, to have a grasp of group policies as in depth as your insurance broker, but knowledge of certain terms and items will help you make better health insurance choices.

As with individual health insurance, small group health insurance is regulated by the states. It is a federal law, however, that requires group health plans to be offered on a "guaranteed issue" basis only. What this means is that group coverage cannot be denied based on any health problems of its employees or dependents. This is important as it does provide a certain level of protection to the small business owner in search of group coverage.

Of course, issues that insurers can and do take into account include aggregate health information, the size of the group, and local physician and hospital costs. Again, this will vary be state, more proshred elite. As a result, you may be able to secure a group plan, but the premiums and waiting periods for certain medical conditions may not be acceptable. This is the primary reason why it is advised that you receive multiple small business health insurance quotes and work closely with your broker when shopping for affordable group coverage.

As with most types of insurance, health insurance is designed to offer a level of financial protection in the event of a costly occurrence. There are two good indicators of financial protection that group plans provide.

The first is the maximum annual out-of-pocket limit placed on the policy. Out-of-pocket limits describe the maximum amount of deductibles, copayments, and coinsurance that employees must pay annually. Obviously, the small business owner's goal is to reach an acceptable balance between their employees' out-of-pocket expenses and the cost of the health plan. A 2006 survey by America's Health Insurance Plans states that the average out-of-pocket limits for PPO plans is about $2700 to $2800, and about $1700 for HMO plans. You may want to keep these numbers in mind when looking for small business group health insurance.

The second indicator of financial protection that group plans may provide is the lifetime maximum benefit. This generally only becomes an issue in cases of serious or chronic illness or injury. Regardless, ideally you would not want any limit on the amount of benefits that can be pad out in a lifetime. In the same survey mentioned above, it was found that most (83% for HMO/POS and 62% for PPO) small group plans had no lifetime limits.

Taking the time to educate yourself about small business group health insurance will allow you, the small business owner, to make better and more informed health insurance choices for you and your employees. Working closely with your broker in providing valuable group health insurance will pay dividends in terms of happy, loyal, and more productive employees.