Group Health Insurance FAQ’s
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Here are answers to the most frequently asked questions about Group Health Insurance in Arizona. Answers apply to small groups (2-50 employees).
Why do rates increase year after year for group health insurance?
Though it is possible for group rates to remain the same for several years, or actually go down, this is not the norm. There are many factors in what seems to be a permanent rise in health insurance costs. Primary causes include:
Government-mandated benefits and other legislative changes.
General price inflation for medical services.
The leveraging effect of fixed deductibles and co-payments – Insurance companies must adjust rates above the general inflation rate when total claim cost increase, but the portion paid by the insured person stays the same.
Cost-shifting – Providers make up for “shortfalls” in government-sponsored program revenue by shifting charges to the private sector.
Increases in health services utilization due to aging, product promotion and improved diagnostic services.
The availability and use of more expensive treatment and drug therapies.
Technological changes and their effect on the intensity of care .
What can an employer do to control group health insurance rate increases?
The basic things you can do are:
Share more of the insurance premium cost with employees.
Choose medical plan designs that neutralize cost increase components by providing incentives for more cost effective plan usage, while channeling patients to the appropriate provider and treatment options. HSA-compatible plans are an example. Other examples are encouraging use of centers of excellence, disease/case management programs and eliminating fixed dollar co-pays.
Aggressively seek out more competitively-priced insurance companies.
Individual Health Management – Offer incentives to use preventive care and wellness services.
For group health insurance coverage, how many employees are required?
At least two employees have to enroll, but you still have to meet the insurance company’s employee participation requirement.
What percentage of a company have to enroll in the group health plan?
As a general rule, at least 75% of eligible full-time employees must either enroll in the plan or have other group coverage through their spouse. At least 50% of all eligible employees
must actually enroll. No participation requirements apply to dependents.
Can part-time employees be in the group plan?
Most health insurance companies will insure only full-time employees (30 or more hours per week) under a small group plan. Blue Cross Blue Shield of Arizona requires 25 hours a week.
When can an employee sign up in a group health plan?
New employees can enroll upon completion of the initial probationary period. Employees who don’t enroll at that time must wait for open enrollment (usually the policy anniversary date) or a for a qualifying event.
When can dependents sign up in a group health plan?
An employee’s dependents can enroll upon completion of the new hire probationary period. If dependents are not enrolled at that time, they must wait for open enrollment (usually the policy anniversary date) or a for a qualifying event.
When can a baby be enrolled in the group health plan?
A newborn baby can be added as of the birth date, but it’s critically important that the company be notified within 30 days. Otherwise, the employee may be
stuck with the nursery bills and the baby’s health insurance will have to wait until open enrollment or a qualifying event.
What is a “qualifying event”?
A qualifying event is an occurrence (such as death, termination of employment, divorce, etc.) that changes an employee’s eligibility status under a group health plan. The term is frequently used in reference to COBRA eligibility, but it can also refer to an event enabling an active employee to make a coverage change at some time other than open enrollment.
How do insurance companies define “full-time” employee?
A full-time employee is generally defined as an employee working 30 or more hours per week, 25 with Blue Cross Blue Shield of Arizona.
How much does the employer have to pay of the group health premium?
As a general rule, the employer must fund at least 50% of the employee health insurance premium. The employer is not required to fund any portion of the dependent health insurance cost.
How long does it take to obtain group health insurance?
From the time application materials are submitted, expect at least a two or three week wait. However, it could take longer, depending on how much additional documentation the insurance company requests. If the application process takes less than two weeks, consider it a pleasant surprise.
It helps if you work with an insurance broker who prepares complete paperwork and anticipates concerns and questions from the insurer’s underwriting department.
What documentation is required by the health insurance company?
A primary concern of the health insurance company is validating that enrolling persons are actually full-time employees. Start-up businesses may not be able to provide these reports. In such a circumstance, payroll records, check stubs or other employment confirmation documentation may meet the insurance company’s requirements.
Will a replacement group health plan cover a pre-existing condition exclusion to employees?
Persons who have satisfied the prior plan’s pre-existing condition exclusion should be credited likewise under the new plan.
Persons who have partially satisfied the prior plan’s pre-existing condition exclusion should have the same status under the replacement group plan.
Will pre-existing condition exclusions be applied, if a business is offering group coverage for the first time?
If a business is offering Arizona medical coverage for the first time, will pre-existing condition exclusions be applied?
Unless an employee or dependent has qualifying prior health insurance that has ended no more than 63 days prior to the effective date of the new group plan, that person will have to satisfy the full pre-existing condition exclusion waiting period.
Our goal is to help consumers have informed decisions about their health coverage. We encourage our visitors to use this information for a more equipped
research process that involves many sources of information. Send any questions to email@example.com, or call 602.405.8769.