If you are looking for insurance for a group between 2 and 50 people, small group insurance in Massachusetts might be right for you. In Massachusetts, all group health insurers are required to write policies for small groups, and they cannot refuse to insure individual employees due to a health condition. There are various carriers that offer small group plans in Massachusetts, among these are two of the largest insurers, Aetna and BCBS.
Small group insurance is the designation given to a group coverage plan when the group is between 2 and 50 people. This type of plan is typically available to employers, members of associations, retirees, or labor unions. A small group health insurance plan will provide care for you and your employees. This type of plan helps to spread financial risk among the members, which can result in lower premiums and more comprehensive coverage for all members. Group coverage in Massachusetts usually costs less than individual coverage, which you have to buy on your own.
There can be tax advantages to group health insurance. Employer contributions to a small business health insurance plan are generally 100% tax deductible, and employees can save on payroll taxes. Small businesses, and certain organizations like non-profits, are generally eligible for group health insurance so long as they can show two or more full-time taxable employees.
Federal law mandates that no matter what pre-existing health conditions small employer group members may have, no small employer or an individual employee can be turned down by an insurance company for group coverage. This requirement is known in the insurance industry as “guaranteed issue.”
In many states, an insurer can include a waiting period in which certain pre-existing conditions aren’t covered. In Massachusetts, they many not impose a pre-existing condition waiting period of more than 6 months on any group member. They must also reduce or eliminate the waiting period in accordance with the employee’s prior “credible coverage.” A 12 month period is the federal maximum an insurer can impose, but many states have their own shorter regulations.
Should something happen and you are going to lose your group insurance, there is a Federal program in place to help. Through COBRA you can extend your coverage for up to 18 months if you lose your job, your hours are cut, of if you change jobs and have a waiting period before your new health insurance plan starts. You will have to pay the full premium yourself during this period, which your employer was previously paying. COBRA also can help your spouse, former spouse, or any children keep their insurance if your job ends, you get a divorce, or in the event of your death.
In some states, group coverage is defined as a group of 1 to 50 employees, but most states do require businesses to have at least 2 employees. Oftentimes businesses with few employees face very specific and strict requirements to prove they are legitimate businesses. This is to help prevent fraud.
Sole Proprietors are often referred to as groups of one. In the states where groups of one cannot obtain group coverage, the business owner often is forced to buy individual health insurance. Massachusetts does guarantee issue for self-employed groups of one. States have different rules for dealing with health insurance for the self-employed. In Massachusetts, the owner of a small business benefits from the same health insurance protections offered to a small business employee, even if there are no other employees.