A How-To Guide on setting up health insurance for a small business. Outlining the quoting process, deciding on a plan, and implementation.
Step 1: Creating your Census/Employee Roster
To start, every insurance carrier requires a Census/Employee Roster in order to issue a quote. The Census should list all employees that would be eligible for benefits. Eligibility is largely based on Full-Time/Part-Time status. Below is a list of what you would need:
- List of Full Time Employees with First and Last Name
- Dates of Birth, including dependents if they will be covered as well.
- Home Zip Code
- Enrolling in Coverage or Waiving
- If looking for disability and life coverage: Salary and Title
Once you have all of your employees information down, usually in excel format(most brokers will have a blank census you can complete) your portion of the legwork is largely done. The broker you work with would also need to know the full legal name of your company, full legal business address, if you have multiple locations, and the nature of your business.
Download a blank Census below!
Step 2: Working with a Broker
It’s important to work with a Group Health Insurance Broker when setting up your plan. Not only does this help streamline the quoting process, often times there are carriers that require you work with one. Brokers do much more than quote, they can provide insight on what competitors in your industry offer, and what plans have been the most popular. Here is what the quoting process looks like from our side:
- Review the Census and Business Information to make sure there are no errors.
- Send Census and Request for Proposal to Carriers
- Quotes return back, usually between 3-10 business days, depending on time of year.
- Review all quotes and prepare to present.
Most carriers have hundreds of different plans, so it can be very easy to overlook the best plan for you. We always recommend utilizing the services of a group health insurance brokerage. Plan Designs and Networks are constantly changing and many brokerages offer their services free of charge.
You can get in contact with us by filling out the form here.
Step 3: Picking a Plan
Your broker will likely showcase and recommend to you several different plans from multiple different carriers. Keep in mind, there are state and federal regulations. In order to offer a group health insurance plan, an employer must contribute 50% of the single employee premium. There is no federal requirement to pay for dependents. But, the government requires employers to have some skin in the game. Here are a few questions to ask when reviewing your plan options for Major Medical insurance:
- Plan Type: Is it an HMO or PPO plan?
- Premium: How expensive is the plan? Age or Composite Rated?
- Network: Based on your location, how is the network of providers? When going through the process of setting up a health insurance plan, you want those who enroll to be able to utilize it. Most complaints employees will have regarding their health insurance, is that their doctor does not accept that particular carrier. Cost is an important metric, but access to providers is equally so. Many employees would rather pay more for better coverage than less for worst. Every insurance carrier will have different providers in their network, as no 2 are exactly the same. It’s important to review the network before making a firm decision on what to offer.
- What is the deductible? How does Co-Insurance work after?
- What is the plans Out of Pocket Maximum?
- What do the copays for services look like? Are their copays for Emergency Room or Urgent Care? Prescriptions or Labs?
- What plan offerings are H.S.A compatible?
Once you refine down what plans make the most sense for you and your employees. Congratulations! For most businesses, this is the hardest part!
Step 4: Compliance Set Up
When setting up health insurance for your business there are several compliance items you will need to be aware of. The compliance portion is one of the main reasons to work with a broker, as rules and regulations for offering health insurance constantly change. The fines for being out of compliance can be costly. Since there are rules determining eligibility, there are coinciding regulations to ensure discrimination doesn’t take place. Below are some of the common compliance items employers need to set up:
- Premium Only Plan(POP)/Section 125 – Allows employees to purchase insurance plans with pre-tax dollars.
- ERISA Wrap
- COBRA Administration
Step 5: Open Enrollment for your Group Health Plan
Open enrollment for your Group Health Plan happens once a year, usually the month before launch. Yearly open enrollment meetings are common. This is when either the broker or the carrier will give a debrief on the plans being offered and how they work. Once employees make their elections, your broker will submit the enrollments to the respective carriers. Depending on the broker you work with, there may be online enrollment platforms, like we use here at EBX. The ability to do enrollments online, reduces legibility errors, and allows employees to keep a direct copy of their elections.
- Decide on Plans to Offer
- Hold a Open Enrollment Meeting
- Employees Enroll
- Carrier receives the elections
See our Sample Portal for Online Enrollments Here.
Step 6: Finalization Paperwork
As with any insurance product, there is some final paperwork that needs to be completed. If you do work with a broker, many firms will prefill a lot of the information. It’s at this time that you would set up billing, and discuss ongoing administration.
Setting up a health insurance for your small business may seem daunting at first, but with the right help, can be made very easy. The above isn’t a conclusive list of everything that needs to be done, but it does summarize the bulk of the process. For specific questions regarding health insurance set up, please contact our office, we would be more than happy to help!