Group Health Insurance Overview

Group medical coverage refers to a single policy issued to a group (typically a business with employees), that covers all eligible employees and sometimes their dependents.

With the passage of the Affordable Care Act, employers have more options to purchase health insurance.  Employers can purchase health insurance through a marketplace, sometimes known as an exchange.  Access Health CT  (AccessHealthCT.com) is Connecticut’s official health insurance marketplace. It offers Connecticut small businesses a range of qualified health care coverage options from health insurance companies and public health care programs.

Connecticut’s Marketplace

Access Health CT (AccesshealthCT.com) is Connecticut’s official health insurance marketplace. It provides information about qualified health care coverage options from health insurance companies and public health care programs. When purchasing insurance through the Marketplace, you may qualify for a tax credit and/or subsidy to reduce your cost sharing. You can also purchase health insurance outside the Marketplace and still be considered covered, however you won’t be eligible for tax credits or lower out-of-pocket costs based on your income.

On AccessHealthCT.com, you’ll find a variety of insurers with plans that are divided into 5 categories – Platinum, Gold, Silver, Bronze and Catastrophic, based on how you and the plan will share the costs of care. For example, a Gold Plan has a higher monthly premium but lower out-of-pocket costs; a Silver Plan has a lower monthly cost than Gold plans but higher out-of-pocket costs, and Bronze Plans have the lowest premiums but the highest out-of-pocket costs. The categories have nothing to do with the amount or quality of care you receive. All plans sold through the Marketplace provide the same essential health benefits, cover pre-existing conditions and provide free preventive services.

Essential Benefits

• All insurance plans must cover a set of essential benefits.  These benefits include:
• Ambulatory care (outpatient) services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance abuse services
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services, including annual physicals and mammograms
• Chronic disease management
• Pediatric services, including dental and vision

Small Business

At this time small businesses with fewer than 50 employees are not required to provide insurance to their employees under the Affordable Care Act.  A small business employer who does not offer coverage can direct their employees to Access Health CT’s Marketplace (AccessHealthCT.com).

Under federal law, small employers (a business with 2 to 50 full-time employees) are guaranteed group coverage if they decide to purchase it, regardless of their employees’ health status. An employer has the option to offer coverage to part-time employees (those working fewer than 30 hours per week), however if an employer offers coverage to one part-time employee, all part time employees must be offered coverage. Dependents of eligible employees are generally able to get coverage under a group plan.

Small Business Health Options Program (SHOP)

Access Health CT, Connecticut’s health insurance marketplace, has a separate exchange, known as SHOP, which is designed specifically for small businesses (employers with 2-50 employees). Employers who offer insurance through the SHOP can start coverage at any time.  If an employee enrolls by the 15th of any month, coverage will begin on the 1st of the following month.

The Affordable Care Act provides a tax credit to small business owners who offer health insurance to their employees through SHOP. In order to qualify, employers must pay for at least 50% of their employees’ premiums to help offset the cost of coverage.  (Employees average annual wages must be no more than $50,000).  Small business employers with over 25 full-time equivalent employees will not have access to the same tax breaks as those small businesses with fewer than 25 employees.

To be eligible for this credit, you must have purchased coverage through the small business health options program, also known as the SHOP marketplace, and coverage must provide the same essential health benefits, cover pre-existing conditions and provide free preventive services.

For more information on the program and whether your business is eligible, visit IRS.gov.

Essential Benefits

All insurance plans must cover a set of essential benefits.  These benefits include:

• Ambulatory care (outpatient) services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance abuse services
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services, including annual physicals and mammograms
• Chronic disease management
• Pediatric services, including dental and vision

Large Business

A business is defined as “large” if it has more than 50 full-time equivalent employees, not counting seasonal workers. Full-time employees are those who work 30 hours or more per week; part-time employees work less than 30 hours per week, figured on a monthly basis.

The Affordable Care Act will require large employers (50 or more full time equivalent employees) to provide health insurance for their employees or pay a per-month penalty on their federal tax return.  The Employer Mandate (Employer Penalty) will not go into effect until 2016 for those business with 50-99 employees. For those with 100 or more employees, it will become effective in 2015.

For more information on the Employer Penalty phase-in, visit The Internal Revenue Service website.

If you have more than 50 full-time equivalent (FTE) employees, you generally won’t be able to use the SHOP Marketplace to purchase health insurance at this time.  However, starting in 2016, all SHOPs will be open to employers with up to 100 FTEs.

Kaiser Foundation Survey of Employers

Employer-sponsored insurance covers about 149 million nonelderly people. (2014)