group health plan Archives

COBRA Insurance

COBRA: What You Need To Know text overlaying image of cobra written on a wooden table

What is COBRA Insurance?

The Consolidated Omnibus Budget Reconciliation Act, widely known as COBRA, was created in 1986 as part of the larger Employee Retirement Income Security Act of 1974 (ERISA). It gives certain workers the right to pay premiums and keep their group health insurance coverage in certain situations. Before Congress passed the ERISA law, people who had health insurance through their employer lost it as soon as they left their job for any reason.

After COBRA was passed, workers who left a company that offered health insurance could choose to keep their coverage temporarily. COBRA coverage is often more expensive than what active employees pay for their group health plan because the company typically pays for some or all of the coverage.

Under COBRA employers are no longer responsible for any health insurance costs. All medical bills can be charged directly to the ex-employee who is receiving the services. COBRA is usually offered to qualifying employees for anywhere between 18-36 months. However, COBRA eligibility and how long the coverage continues depends on certain circumstances.

Who Is Required To Offer COBRA?

Business with 20 or more employees that offer a group health plan, are required to also offer COBRA insurance. Even if a company doesn’t have 20 full-time employees, they may still be required to offer COBRA coverage. This is because COBRA adds up the hours of two or more part-time workers to make one full-time worker. For example, if a company has two part-time employees who each work 20 hours per week, the law views this the same as one full-time employee.

What are Mini-COBRA Laws?

Another thing to think about is that even if a company has less than 20 full-time equivalent employees, your state might still require COBRA insurance to be offered. Some states have what are called, “mini-COBRA” rules aiming to cover employees providing health insurance but have fewer than 20 employees. Like federal COBRA, mini-COBRA laws require group health plans to provide continuing health coverage to eligible employees who would otherwise lose coverage due to a qualifying event. In a few states, the number of workers is between 2 and 19. Other states require almost all businesses, no matter how big or small, to follow the rules of mini-COBRA.

The length of coverage changes by state. It can be as short as 2 to 6 months or as long as 39 weeks or even forever if the employee meets certain conditions, such as becoming totally disabled while working. In some places, employees are eligible for mini-COBRA even if they were fired for being a bad employee. There is some kind of mini-COBRA law in the following 40 states:

Arkansas
California
Colorado
Connecticut
District of Columbia
Florida
Georgia
Illinois
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Minnesota
Mississippi
Missouri
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
West Virginia
Wisconsin
Wyoming

If a business is subject to mini-COBRA laws, they must let eligible workers know about their rights to keep coverage. The date for giving notice varies by state, so check your state’s laws to make sure you get the word out on time.

Who Qualifies for COBRA Insurance?

Types of Employees

Employees may be qualified for COBRA continuation coverage if they are enrolled in an eligible group health plan and meet certain qualifying event requirements. This could include:

Full-time employees
Part-time employees
Spouses of eligible employees
Dependents of eligible employees
Retirees

There are limits to how long a company has to offer COBRA coverage. Even if the business has at least 20 employees, some employees won’t be able to get COBRA coverage because they didn’t choose a qualifying plan, they were fired under certain circumstances, or other special situations including:

Employees who are ineligible for coverage in the group plan
Workers who declined to participate in the group health coverage
Employees who are enrolled for benefits under Medicare
Employees terminated for gross misconduct

Qualifying Events

In addition to being an employee and being enrolled in a qualified group health plan, an employee must also experience a qualifying event to gain continued coverage. This usually includes something that causes the employee to lose their group health benefits such as:

Job loss, whether voluntary or involuntary (except in the case of gross misconduct).
Reduction in work hours, resulting in the loss of employer-sponsored health insurance

COBRA coverage can also extend to an employee’s spouse and dependents if the qualifying event affecta the family’s ability to keep their health insurance. Qualifying events affecting spouses and dependents include:

An employee’s job is lost, or hours are reduced causing his dependents and/or spouse to lose coverage
A spouse gets divorced or legally separated from the covered employee.
The covered employee passes away
The covered employee becomes eligible for Medicare, and causes dependents to lose coverage

Employer Responsibilities

Plan administrators are required by law to tell employees who qualify for COBRA, when their status changes. In some cases, the employer themself is in charge of running the plan. If an employer has employees that qualify for COBRA, they are legally responsible to do the following:

Tell the group health plan administrator within 30 days of a qualified event if a person is eligible for COBRA.
Give notice to employees who are qualified for COBRA within 44 days about their COBRA rights.
If COBRA coverage is rejected for any reason, let the people who need it know within 14 days.
If the employee chooses to keep coverage under COBRA, give them the same coverage as the plan they were on before the qualified event.

Once an employee has a qualifying event, COBRA requires group health plans to give the employee and any qualifying dependents ample time to decide if they want to keep their coverage under COBRA. More specifically, the employee must have 60 days to choose to keep benefits or not. Even though everyone in a household may have experienced the same qualifying event, they can make different decisions regarding continued coverage. For example, the employee, their partner, and any qualifying dependents can each choose whether or not they want to keep their coverage, depending on what’s best for them.

Health Insurance Alternatives to COBRA

If you experience a qualifying event, but either your employer doesn’t offer COBRA benefits, or COBRA benefits are simply too expensive for you to pay for, you have other options. Depending on your financial situation and personal preferences, you can get:

Marketplace Health Insurance: These are Affordable Care Act (ACA) plans purchased through the Health Insurance Marketplace. It’s also important to not that after losing employer coverage, you’ll qualify for what’s called a Special Enrollment Period (SEP), allowing you to sign up for a new health plan outside of the normal Open Enrollment Period.
Short-Term Health Insurance: This specialized coverage provides temporary insurance covering essential healthcare needs. A downfall of these plans is that they generally have limited benefits compared to traditional coverage.
Medicaid: Depending on your income, you could qualify for Medicaid, which is a stat-run program that offers low-cost or free health coverage.
Private Health Insurance Plans: These are standard health insurance plans purchased directly through an insurance company or broker.

How EZ Can Help

It’s crucial to understand the laws and requirements regarding COBRA, so that you know your health insurance rights after leaving a job or experiencing another qualifying event. Even though COBRA coverage is a great option for many individuals, for others, it’s either not available at all or simply unaffordable. If this is the case for you, don’t worry, you have other options, and EZ.Insure is here to help you explore all of them.

EZ.Insure makes it simple get the protection you deserve. Our user friendly-platform offers free, no-obligation quotes, a side-by-side health plan comparison tool, and 24/7 access to expert insurance agents.

To get started, and learn more about your health coverage options, simply enter your zip code in the bar below or call 209-593-6584 to talk to an agent.

The Advantages of Group Insurance

Being a small business owner means being on a tight budget, so fitting in a group health insurance plan for your employees can seem a bit overwhelming. Offering group health insurance, though, is not something that you should overlook. If you do not offer a healthcare plan, you might find that it is more difficult to recruit and retain good employees. In fact, surveys show, most employees say that they would prefer to be offered health insurance over a pay raise. While group health insurance can seem unaffordable or unattainable, providing healthcare has many advantages that can balance out the costs – and there are ways to get great plans at an affordable price.

Tax Credits & Deductions

Contributing to your employees’ premiums can be expensive, but you can get some of that money back through tax credits and deductions. If you run a small business, you might qualify for the small business health care tax credit if you offer your employees a plan through the Small Business Health Options Program, or SHOP. To qualify for the minimum credit, you must have fewer than 25 full-time or full-time equivalent employees earning an average of $50,000 or less per year; to qualify for the maximum credit, you must have fewer than 10 employees earning an average of $25,000 or less per year.

If you decide to offer a HRA or HSA, your employees will get tax advantages (all of their contributions and reimbursements are pre-tax), and so will you. Contributions to your employees’ HSAs and HRA reimbursements are tax-deductible.

Lower Payroll Taxes

Another tax benefit of offering group insurance is the ability to lower your payroll tax. When employees pay for health insurance, the cost of their premiums is typically excluded from their taxable income. This lowers most workers’ tax bills, and in turn reduces their after-tax cost of coverage. Lower taxable income for your employees means lower business payroll taxes for you. In addition, if you contribute to your employees’ HSAs, you can also save on payroll taxes because HSA contributions are deducted from your payroll on a pre-tax basis.

caucasian hand with a suit on holding a blue card with a heart on it and a family holding hands together — *You and your family can participate in your group insurance plan.*

You Can Participate In The Plan

Offering health insurance to your employees means that you and your family can also participate in the plan. Compared to individual plans, group policies offer more pre-deductible benefits such as preventative care and primary doctor visit coverage. They also offer lower copays for prescription drugs and routine care.

Lower Costs Due To Larger Risk Pool

The higher the number of employees that participate in your group plan, the lower the cost of health insurance. When more people are included in your plan, you have a larger risk pool, and everyone will have more options at a lower price.

Attract & Retain Employees

Do you want healthy, productive employees who show up to work and boost your bottom line? Then provide them with group health insurance! If you want employees who come to work and work hard for you, there’s no better way to ensure you’ll get that than by offering health insurance. They’ll be able to receive care when they need it, and they will feel like you have invested in them, so they will invest in you. This will lower your hiring costs, improve morale, and reduce absenteeism and risks associated with poor health.

Health insurance can help you keep your current employees happy and healthy, and it can also help you to attract the best employees when it comes time to hire. Job seekers expect employers to offer health insurance and partially pay for their premiums, so you risk missing out on great candidates and potential employees if you’re not offering some sort of plan. You don’t want to be disappointed if a candidate rocks the interview, you offer them the job, and they turn it down because you’re not offering the benefits they’re looking for!

You Can Save Money

When searching for a group health insurance plan, you have to look beyond the premium. The costs associated with group health insurance plans include premiums, which you contribute to, but also co-payments, deductibles, and coinsurance, which your employees are responsible for. If you are looking for a way to lower your premium costs, consider offering a high deductible health plan. The higher the deductible a plan has, the lower the premium costs will be, so you can save on contributions. You can also offer a HSA with qualified high deductible health plans, so your employees will be able to put money aside to help with the cost of the higher deductible.

Affordable group health insurance plans are out there, and you can find the right one for your business as long as you use a licensed, trained agent to help you. There are ways to offer everyone the most coverage while saving the most money. The best way? Start by talking to an EZ agent! All of our services are completely free, and there’s never any hassle or obligation. To instantly compare plans in minutes from top rated carriers around the country, enter your zip code in the bar above, or to speak directly to one of our agents, call 888-998-2027.

Small Business Group Health Insurance FAQ

Starting a small business is a great accomplishment! It takes a lot of hard work, and you probably have a to-do list a mile long. One very important thing on your list should be finding a great group health insurance plan. Offering health insurance to your employees leads to so many advantages for your business, like healthier, happier employees who are more likely to stay in their jobs, and tax breaks for you. There are many high-quality affordable plans to choose from, but you might be wondering where to begin, and you’ll probably have a lot of questions as you search for the right one for your business and your employees. That’s where EZ comes in: we’ve also got the answers to your most frequently asked questions and can give you a free quote to help you compare local group health insurance plans from all of the top carriers.

illustration of a woman with a headset on with her hand out and money floating over it — *An agent will be able to offer you exclusive deals and promotions from insurance companies.*

Should I use an agent or broker?

Both insurance brokers and insurance agents act as the middlemen between insurance buyers like you, and insurance companies. Using an insurance agent, like one of EZ’s, is the best option for small business owners looking to purchase a healthcare plan. Agents can expedite the buying process, they have specialized knowledge about the policies they sell, and they can keep you up-to-date on any changes to your plan. Our agents also have access to exclusive products from the top-rated insurance companies, which can save you more money than if you go it alone.

What is the minimum number of employees to get a group plan?

If you have 50 or more full-time employees, you are required to provide health insurance or you will be penalized under the employer mandate of the Affordable Care Act. You are eligible for a group plan as long as you have 2 full-time (or full-time equivalent) employees, including yourself. Full-time employees are considered those who work 30 hours or more a week.

The 2-employee rule is always true for tax-advantaged small business health insurance options program (SHOP) plans (although you will need 70% participation in your plan). If you’re looking into other group plans, some insurance companies may have different requirements. Ask one of EZ’s agents to check for you.

What is the average cost for a group health insurance plan?

Small business health insurance costs are determined by your location, number of employees, and how much you would like to contribute to your employees’ coverage. The average cost of annual premiums for employer-sponsored health insurance was $7,188 for individual coverage and $20,576 for family coverage in 2019. The average annual deductible amount for individual coverage was $1,655 for covered workers.

SHOP plans, as mentioned above, can offer some savings through the small business health insurance tax credit, if you have fewer than 25 full-time employees and meet certain requirements. Speak with an EZ agent about this possibility, or use our online tool to check fast, no-cost quotes for all available plans. We can help cut costs – but not benefits – by comparing multiple plan options.

How do I communicate the new benefits to my employees?

Simple, just ask your EZ agent! EZ’s agents are experienced in helping you communicate new benefits to your employees. Our agents will provide a Summary of Benefits Coverage (SBC) to participants and their beneficiaries before enrollment in the plan, at renewal of the plan, within 90 days of a Special Enrollment, and within 7 business days of a written request. They will also help you provide each employee covered under the plan a Summary of Material Modification (SMM) when there are changes made to their health benefits.

How much do I charge employees to be on the plan?

red "50%" sign — *Employers are required to contribute at least 50% of their employee’s health insurance premiums, but you can contribute more.*

Employers are required to contribute at least 50% of each employee’s health insurance premiums. On average, employers contribute approximately 82% of individual insurance premiums, and around 71% of family plan premiums. The more that you contribute to your employees’ premiums, the more likely employees are to enroll, and the more you will save – and don’t forget all of these contributions are tax-deductible!

You have options when it comes to plans and premium prices, so talk to an EZ agent about what’s best for you and your employees. For example, if you choose a plan with a low deductible, but higher premium, you may not be able to contribute more than 50%, and your employees might find it too expensive to enroll in your plan. In this case, you might want to look into a high deductible health plan, which would allow your employees to contribute to a health savings account (HSA). An EZ agent can help you determine how much you can afford to contribute, and other ways you can save!

Will offering health insurance help me attract better employees?

Businesses that offer health insurance tend to attract and recruit the best candidates. Most job seekers won’t even look twice at a posting if an employer does not offer health insurance – job seekers want to know that a prospective employer is willing to invest in them. Surveys show that 46% of job seekers said that healthcare was a deciding factor in taking a job, and that 60% of employees would take a job with lower pay but better benefits.

Will my employees be happier if they have health insurance?

Offering health insurance can mean having more loyal employees and a lower turnover rate. 83% of employees say health insurance is extremely important when deciding whether or not they should change jobs. Employees with health insurance are happier, less likely to leave their jobs, and healthier.

One survey found that 72% of employees said having more work benefits would increase job satisfaction. Knowing that they will be protected in case of an emergency, that their chronic conditions will be covered, and that they will not have to worry about large medical bills, means less stress for them and more productivity for you.

Will productivity go up if we offer health insurance?

Absolutely! In one recent study, 60% of employers said that offering health insurance led to higher productivity levels at their businesses. Not only will offering health insurance to employees lower their stress levels, but it will also keep them healthy – and healthier employees are less likely to take time off for being sick. When you invest in your employees, you’re boosting your bottom line.

What other benefits should I consider offering?

caucasian man laying in bed with the laptop on his lap with a doctor on the screen. — *Offering telemedicine to your employees is a great benefit that can help you save money.*

When choosing a plan, look at what “extra” benefits it offers – for example, telemedicine. This convenient option can actually save you thousands due to the reduced cost of healthcare claims from unnecessary visits to the doctor and reduced visits to the emergency room. It is more convenient (and less expensive) for employees to call and speak with a doctor to receive care.

You can also consider offering a workplace wellness program. These programs help keep healthcare costs down by giving incentives to employees to live healthier lives. These programs can include things like health screenings, programs to quit smoking, gym membership stipends, diet and weight loss programs, or diabetes management programs. To find out what extra benefits you can offer, talk to an EZ agent.

How will I know if my doctor and my employees’ doctors are in-network?

If you are looking for a plan that includes specific doctors, speak to an EZ agent to find a plan that includes the best network for you and your employees. Our agents can easily access any insurance company’s networks and included providers in minutes.

If you already have a plan, check your plan info to see if there’s a list of covered doctors. You can also call your doctor’s office, ask for their tax ID number, and then call your insurance carrier to find out if they are covered. Or you can avoid this long and annoying process by simply asking one of EZ’s agents to check for you!

EZ.Insure understands how time consuming and overwhelming finding a group health insurance plan for your small business can be. To make the process easier, we provide you with a personal agent who will answer all of your questions, compare plans, and provide you with free, instant, and accurate quotes. We do all the heavy lifting for you so that you can provide the best insurance for your employees, without breaking the bank. Let us help you save time and money. To get started, enter your zip code in the bar above, or to speak to a specialized agent within your area, call 888-998-2027.

Are Employers Required To Offer Health Insurance?

Medical costs in the U.S. are high, which is why a lot of employees look for a job that offers health insurance. Over 88% of people consider health insurance benefits when choosing a job. For companies, providing group insurance to

cartoon of a man in a suit pointing at a clipboard with magnifying glass over a certain part. — *There is no specific law that requires employers to provide health insurance coverage to their employees, but there is a penalty.*

employees costs a lot of money, so some companies opt out of providing insurance. But are they required to? Yes, and no.

Affordable Healthcare Act

There is no specific law that requires employers to provide health insurance coverage to their employees. However, in January of 2015, the Affordable Care Act, ACA, required that employers who have 50 or more full-time employees provide health insurance. If they do not, they will face a tax penalty.

According to the ACA, full-time employees are employees who work an average of 50 hours a week.

Group Insurance Penalties

If a larger company with 50 or more full-time employees does not offer health insurance, they are subject to IRS penalties.

The IRS will penalize the company if one or more of their full-time employees gets a premium tax credit for getting their own health insurance coverage from the Marketplace. The company can owe up to $2,500 for each employee.

The company must offer insurance to 95% of their employees to avoid a penalty, and it must be year round. If the business offers healthcare for some months, and not others, then they will face a portion of the annual penalty.

Small Businesses

people working inside many cubicles. — *Small businesses (less than 50 employees) do not have a penalty if they do not offer health insurance to their employees.*

Small businesses are not required to offer healthcare coverage to their employees. Since they have less than 50 full-time employees, they will not face penalties. If a small business does not offer health insurance, then a person can seek their own health insurance plan from the Marketplace or a private company.

While there is no longer a penalty for going without healthcare coverage, it is important to seek out information on different plans. There are plans within your budget that will meet your needs and lifestyle. If you need help searching and comparing all the group insurance plans around, EZ.Insure can help. We offer local specialized insurance agents that can do all the comparisons for you, and just provide you the quotes. All for free! It’s that simple. To begin, enter your zip code in the bar above, or to speak to an agent, email [email protected], or call 888-998-2027. There is no hassle involved, and no obligation to buy, and no headaches. Just easy, fast, and free quotes!

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