Large Group Health Plan

What Is A Large Group Health Plan?

Large group health plans are just like regular group health insurance plans in that they are provided by employers, and cover employees. However, while most group health insurance plans are offered to companies with 51 or more employees, some states define group health insurance as large group health plans when they are offered to 101 or more employees.

Large Group Health Insurance Laws

Under the Affordable Care Act (ACA), what many know as Obamacare, new laws were imposed on employers, specifically medium to large-sized employers. While the new laws were originally set for January 1, 2014, they were eventually postponed to take effect January 1, 2015.

While the majority of large employers, defined as companies with 100 or more full-time equilvalent (FTE) employees already offered quality coverage, the following laws were put in place:

  • The health coverage offered by the employer must meet the minimum essential coverage requirement, which is determined each year.
  • The percentage of full-time employees that the employer must offer health coverage jumped from 70% to 95% in 2016.
  • Employers who fail to meet requirements must make an "employer responsibility payment," which is essentially a tax penalty.

The Difference Between Large Group And Small Group

Large group health insurance must have many options including medical, dental, vision, and long-term care. You may ask the provider if they have a plan that falls into all these categories, and they offer options that they believe will be affordable for your staff. Small group health insurance plans offer fewer discounts, less options, and are designed for smaller businesses.

Advantages Of Large Group Health Insurance Plans

You may change providers every year on a large group health plan, and you must do your research online on each new coverage option. These companies are all quite expansive, and they have many options for covering your staff. You may choose to offer insurance from many different companies, and the coverage may be compared when your employees choose.

Employees who have more than one insurance company to choose from are selecting based on price and coverage, and you may ask an independent agent to show you a number of different options for employees. Business insurance is an important part of your overall business plan, and you must have an agent put together a package of companies that may be useful to you.

A large group health plan must be paid every month through the paychecks in your office, and your accounting team must ensure that they have sent out all the payments to these carriers. The insurance carrier expects to see payments come in every month, and they may offer a discount to your company if you have a large number of employees. You are dropping prices for your staff, and your company's contribution goes down at the same time.

The payments for insurance plans are made through your company, and you must ensure that you have spoken to the insurance company about how they prefer to receive payments. They often receive their rates more than normal, and they may speak with you about what they could do to make your company a premium partner. Your employees are given first access to new plans, and the large group health plan you have selected may become a model for other firms.

Large group health plans last for a year, but your company must purchase the plans early every year so that they may be offered tro your staff. Your staff members are choosing during the open-enrollment period which is typically in the fall. You are making these choices in the summer, and the insurance company offers a period where you may negotiate a new plan or have an agent do so for you.

Disadvantages Of Large Group Health

If your company got larger, you may request further discounts or a reduction in the employee contribution. However, you may find that the large group health plans are often very hard to manage as a business owner. You must hire someone to manage these plans for the office, and you may find that the plans require too much employer contribution. Work closely with the insurance firm to determine if a plan such as this is right for you.