Coverage line
Group Health Insurance
The medical plan your business buys for your team — what it has to cover, what moves the price, and what you actually get to decide.
Group health insurance is the medical plan an employer buys for its employees, in which the business — not the employee — is the group policyholder. In the small group market, federal rules settle much of what that plan looks like before anyone quotes it: an issuer has to accept an employer that applies, employee health history cannot move the rate, and the plan has to cover a defined set of benefit categories.
What is left is genuinely yours — which plan or plans to offer, how much of the premium your business pays, whether dependents are offered coverage, and how long a new hire waits before enrolling. Two employers arrive here from opposite directions: one has never offered benefits and wants to know whether a small business is even allowed to buy a group plan, the other has just been handed a renewal that came in higher. Both are asking the same question — what is fixed here, and what can I change? The fixed parts come first below, because no quote negotiates them.
What it covers and what it does not
Coverage sold in the small group market has to include the essential health benefits package. That requirement sits at 45 CFR 147.150, which governs what an issuer sells in the individual or small group market, and the categories it is built from are named at 45 CFR 156.110:
- Ambulatory patient services
- Emergency services
- Hospitalization
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
A plan cannot omit one of those categories, and an issuer has to keep an appropriate balance among them so that benefits are not unduly weighted toward any one. What differs between two plans, then, is rarely whether a category is covered at all.
The list is a floor, not a ceiling, so a given plan may include more. But four things sit outside what it is required to carry, and each is bought as its own line.
Where group dental begins. Group health carries dental care for children inside pediatric services, and no adult dental category — the required list names pediatric oral and vision care and stops there. Routine dentistry for the adults on your plan is the job of group dental, bought beside the medical plan rather than inside it.
Where group vision begins. The same boundary runs through eye care. Vision care for children sits inside pediatric services; exams, lenses and frames for the adults on your plan are not a required category. That is the job of group vision.
Where group disability begins. Federal rule defines health insurance coverage, at 45 CFR 144.103, as benefits consisting of medical care, and a paycheck is not medical care. When an employee is out for weeks, the treatment routes to the health plan and the lost income routes nowhere — unless you have bought group disability, which replaces part of the wage instead of paying the provider.
Where group life begins. Group health pays for treatment while an employee is living and nothing to a family afterward. A death benefit is not medical care; group life is the line that does that job.
How it works for a small business
An issuer has to take your group
An issuer offering coverage in the small group market in a state must offer every product it has approved for sale there to any employer that applies, and must accept any employer that applies for one of them. Your employees’ health history does not decide whether your group can buy a plan. The guarantee is not unconditional, though: 45 CFR 147.104 makes it expressly subject to the paragraphs that follow it, which is where participation and contribution live.
Health history cannot move your rate
Premium in the small group market may vary on a closed list of factors and nothing else: individual or family coverage, the rating area, age, and tobacco use. The rule, at 45 CFR 147.102, says it plainly: the rate must not vary by any other factor. Health status is not on the list. Age is permitted within a federally capped band, and a state may set its own uniform age rating curve. One consequence catches employers whose team is spread out: the rating area comes from the group policyholder’s principal business address, not from where each employee lives.
Participation and contribution are the real gate
Two requirements sit outside the guarantee and do the work people assume underwriting does. A minimum share of your eligible employees has to enroll, and your business has to pay a minimum part of the premium. Neither level is set nationally — a state may set one by law, and otherwise issuers follow what is customary there. An employer that cannot meet them is not simply turned away: under 45 CFR 147.104(b) the issuer may restrict it to an annual enrollment window instead.
The counting rule is friendlier than it sounds. Participation is measured against the employees you offer coverage to, and an employee already covered somewhere else — a spouse’s group plan, government coverage, or coverage they bought on their own — counts toward it rather than against it.
Offering a plan is your choice
The employer shared responsibility provisions — what employers have heard called the employer mandate — apply to applicable large employers. A business of this size is not one, and so is not subject to those provisions or to the employer information reporting that travels with them. Offering a plan is a decision rather than a federal obligation, which means it has to earn its place on your payroll.
Whether your business counts as a small employer at all is a federal definition with a state override — 45 CFR 155.20 sets it by average employee count over the preceding calendar year, and lets a state raise that ceiling for its own market — so the line moves depending on where you are.
SHOP is a state-by-state question
SHOP — the Small Business Health Options Program, defined at 45 CFR 155.20 — is a program operated by an Exchange through which a qualified employer gives its employees access to one or more qualified health plans. It is not one national program: an Exchange may be established and operated by a state or by HHS, so whether a SHOP operates where your business is, who runs it, and how it works are state-level facts. Where it is available, it is organized around employer decisions: one plan or a choice of several, health coverage or dental or both, how much you pay toward premiums, whether dependents are covered, and how long new employees wait. An eligible employer need not wait for a set time of year, and can work through a SHOP-registered agent or broker.
Your employees’ share can come out before tax
Whether your employees’ contributions leave their pay before or after tax depends on a document you may not have. A cafeteria plan is a written plan letting employees choose between cash or taxable benefits and certain qualified benefits taken before tax, and IRS Publication 15-B lists accident and health benefits among the qualified benefits. Without it, the contributions come out after tax — paperwork rather than plan design, and easy to miss.
Common claim categories
Claims on a group health plan are not exotic. They cluster into a few shapes that come straight out of the benefits the plan is required to carry, and a plan design is easier to judge once you can picture what it will meet.
An admission nobody planned
An employee goes to an emergency room and is admitted. The plan answers through its emergency services and hospitalization benefits, the carrier settles with the facility on its contracted terms, and the member owes whatever the plan design left them.
A prescription taken every month
Prescription drugs and chronic disease management are both required categories. Between them they cover what your employees meet month after month, which is why the drug list attached to a plan deserves a close read before you accept a renewal.
Mental health and substance use treatment
Mental health and substance use disorder services, including behavioral health treatment, are a required category in their own right. It is easy to assume that is a rider; it is not. The practical question is which providers near you are in-network.
The other half of this is what those categories look like with nobody standing behind them. An admission a group plan would have absorbed lands on an employee’s household in full, and a monthly prescription becomes a monthly decision about whether to fill it. We will not put a figure on that exposure, because we have none we could stand behind. It is the reason a business under no obligation to offer a plan offers one anyway.
Limits and structure
Group health has no single limit the way a liability policy does. It has a structure, with three dials that move independently: how much of the cost the plan design carries, which providers the plan will pay, and who carries the claims risk.
What the metal labels actually mean
Bronze, silver, gold and platinum are, under 45 CFR 156.140, labels for actuarial value — the share of expected total covered costs the plan design is built to carry, with the balance falling to the member through cost sharing. They are not quality grades, network sizes or service levels. Two plans wearing the same label can differ in network and in how the cost sharing is arranged between your deductible, copays and coinsurance — which is why we moved you to a silver plan starts a conversation rather than ending one.
How the network gates the plan
The letters in a plan name describe how the network gates coverage and cost, not how rich the benefits are; HealthCare.gov defines them this way. An HMO usually limits coverage to doctors who work for or contract with the HMO and generally will not cover out-of-network care except in an emergency. A PPO builds its network by contract: the member pays less inside it and can go outside it for an additional cost. An EPO covers services only in the plan’s network, except in an emergency. A high deductible health plan carries a higher deductible, so the member pays more of their own care before the plan pays its share, and it can be paired with a health savings account — which is why HealthCare.gov now more commonly calls it an HSA-eligible plan. What decides between them is whether the doctors your team already sees are inside the network you are buying.
Who carries the risk
In a fully-insured plan the issuer carries the claims risk, and the coverage answers to the small group market’s federal requirements — essential health benefits, guaranteed renewability, and the single risk pool. In a self-funded plan the employer carries the risk and pays employees’ and dependents’ medical claims from its own funds, contracting enrollment, claims processing and provider networks to a third party administrator.
Level-funding looks like the first and is built like the second, and the Departments of the Treasury, Labor and HHS describe it as increasingly used by small employers. In their description, a plan sponsor makes set monthly payments covering estimated claims costs, administrative costs, and stop-loss premium for claims above an attachment point beyond which the sponsor is no longer responsible for paying claims. A year under the amount attributed to claims generally produces a refund or a surplus carried forward; a year over it may push the next year’s payments up.
The part worth reading twice is theirs rather than ours. If the entire arrangement is treated as self-insured, the essential health benefit requirements would not apply, and such arrangements are not generally treated as subject to the guaranteed renewability and single risk pool requirements that apply to fully-insured small group coverage. Employers moving from fully-insured coverage, they added, may be unaware that the plan they are offering may not include benefits that would have to be covered if it were fully-insured. That sits in a proposed rule, and the final rule that followed expressly did not address level-funding — so read it as a description, not a requirement. It changes the question worth asking: not what the payment is, but which required benefits the plan includes.
Why Wexford Health Insurance
We are an independent agency, and we place group health for employers with employees on payroll. That is the buyer this brand is built around rather than one line on a long list, which is why this page spends its time on mechanisms rather than adjectives.
What independence buys you is comparison. An employer working through a single-carrier relationship gets one renewal and one alternative to it, and no way to tell whether the number in front of them is normal. We take your renewal to the markets we are appointed with, and separate which part of the difference is plan design, which part is network, and which part is rating factors nobody can change.
For an employer who has never done this, the work is mostly clearing the paperwork away so the real decision is visible: what you contribute, what you offer, and how long a new hire waits. Wexford Health Insurance is part of Wexford Insurance, LLC, and the same people answer the phone at both. Call 317-942-0549 and you will get a straight answer about whether what you are looking at is worth shopping.
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The rest of the benefits package
Frequently asked questions about Group Health Insurance
Can an insurance company turn my business down because of my employees’ health?
No. Under 45 CFR 147.104, an issuer offering coverage in the small group market in a state must offer every product it has approved for sale in that market to any employer that applies, and must accept an employer that applies for one of them. Your employees’ health history does not decide whether your group can buy a plan. The guarantee is not unconditional, though — participation and contribution requirements sit outside it, and they are the conditions that actually gate a small group.
Is my business required to offer a health plan?
The employer shared responsibility provisions apply to applicable large employers. A business of this size is not one, so it is not subject to those provisions or to the employer information reporting that goes with them. Offering a plan is a decision you are making because you want to, not a federal requirement you are meeting.
What does a small group plan have to cover?
Coverage sold in the small group market has to include the essential health benefits package — that requirement is 45 CFR 147.150 — and the package is built from a defined set of benefit categories, named at 45 CFR 156.110: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services including behavioral health treatment, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services including oral and vision care. A plan cannot simply omit a category, and an issuer has to keep an appropriate balance among them so that benefits are not unduly weighted toward any one.
What do bronze, silver, gold and platinum actually mean?
They are labels for actuarial value — the share of expected total covered costs the plan design is built to carry, with the balance falling to the member through cost sharing. That is the rule at 45 CFR 156.140: actuarial value is what determines whether a health plan offers a bronze, silver, gold or platinum level of coverage. They are not quality grades, network sizes or service levels. Two plans wearing the same metal label can differ in network and in how the cost sharing is arranged.
How much do I have to contribute, and how many of my employees have to enroll?
Minimum employer contribution and minimum group participation are both real requirements, and neither level is fixed nationally. Where state law sets one, the state governs; where it does not, issuers follow what is customarily used in that state — 45 CFR 147.104(b) speaks of employer contribution and group participation rules as allowed under applicable state law, and 45 CFR 155.706 points a SHOP’s minimum participation rate at a state law where one exists and at customary issuer practice where one does not. A group that cannot meet them is not simply declined — under 45 CFR 147.104(b) the issuer may restrict it to an annual enrollment window instead. Participation is measured against the employees you offer coverage to, and an employee already covered somewhere else counts toward your participation rather than against it.
Can my employees pay their share of the premium before tax?
Only if a cafeteria plan is in place. That is a written plan letting employees choose between receiving cash or taxable benefits and certain qualified benefits taken before tax, and IRS Publication 15-B lists accident and health benefits among the qualified benefits a cafeteria plan can include. Without that written plan, the employee share comes out of pay after tax. It is paperwork rather than plan design, and it is easy to miss entirely.
What is the difference between a fully-insured plan and a level-funded one?
In a fully-insured plan the issuer carries the claims risk and the coverage answers to the small group market rules — essential health benefits, guaranteed renewability and the single risk pool. The Departments of the Treasury, Labor and HHS describe level-funding as a self-funded arrangement: set monthly payments covering estimated claims, administration and stop-loss premium, with the employer off the hook above an attachment point. Because the arrangement is treated as self-insured, the Departments have said the essential health benefit requirements would not apply to it — so the question to ask before signing one is which of those benefits the plan actually includes.
Do I have to wait for a particular time of year to start a plan?
An eligible employer using SHOP can start offering coverage at any time of year. SHOP is run by an Exchange — that is the definition at 45 CFR 155.20 — and because an Exchange may be established and operated by a state or by the federal government, whether one operates where your business is, who runs it and how it works are state-level questions rather than national ones. You can also work through a SHOP-registered agent or broker.
Find out what your group would actually cost
Tell us your state, your headcount and what you have now, if anything. We will come back with a pricing indication and what it would take to put a plan in place.