Small-Sized and Medium-Sized Business Employers

Understanding the Basics About Employer-Sponsored Health Insurance

Health insurance plans vary greatly in terms of employer and employee costs, limitations and exclusions, choices of health care providers, types of medical services provided (such as preventative care and health screenings), hospital and mental health coverage, prenatal, and maternity care and prescription drug costs. This can make finding the right health insurance plan for your business confusing, complex, and intimidating.

As you begin to exploring affordable health insurance plan options for you and your employees, keep in mind the following:

• Most insurance companies have "Small Employer Group Plans" for employers with less than 50 employees. They may offer plans for a varying range of small employers such as those with 2 to 15 employees or with 16 to 50 employees. Ask for information on these "Small Employer Group Plans".
• An insurance company cannot refuse to sell coverage to a small business on the basis of employees' or dependents' health status. (This is called guaranteed issue.)
• Once the health plan is sold to a small group, it must renew the plan regardless of the health or experience of the group. Renewal premium rates could rise, but many states limit the amount a health insurance carrier can increase premiums based on health status.
• Premium health insurance costs can be based on several factors, including age and gender of employees, number of dependents, and type of occupation.
• Employers may be required by the health plan to pay a minimum share of their employees' health insurance premiums.
• Some states may set certain criteria for providing coverage, so contact the Alabama Department of Insurance about health coverage requirements for Alabama businesses.