Group Health Insurance for Small Businesses (Small Employers)



Providing health insurance for employees is by far the single-most expensive benefit offered by employers and constitutes one of the greatest challenges many businesses face today. Yet, health insurance is extremely important to most employees and their families and is a powerful tool for recruiting and retaining the best workers.

Employers are not required to offer health insurance. If you do, and have two to 50 employees, the state regulates your insurer and the policies available to you as a small employer. These regulations allow small employers to purchase health insurance regardless of the health of their employees. They ensure that insurance companies use the same rate-setting factors for all small employer groups and severely limit the use of claims in setting a particular group's rates.

What is a group health plan?

It is any arrangement that an employer establishes or maintains to provide employees or their families with medical care, whether it is provided through insurance, by a health maintenance organization, out of the employer's assets, or through any other means. "Medical care" includes for this purpose:

• Inpatient and outpatient hospital care
• Physician care
• Surgery and other major medical benefits
• Prescription drugs
• Dental and vision care

Life insurance is not considered "medical care," nor are disability benefits; and COBRA does not cover plans that provide only life insurance or disability benefits.