Group and Individual Health Insurance

We are small business owners and we know that small business owners and their employees like choices! Two of your choices for health insurance are Group Insurance and Individual Insurance.

Group Plans
In 1992, the California legislature passed AB1672 (Margolin) which drastically changed the way insurance is provided to small group employers. In addition to establishing the Purchasing Pool, here are some of the changes for all small group products:

• Guaranteed Coverage: Requires health insurance and related entities to provide health coverage for all small employers and their employees.
  
  
• Preexisting Conditions: Provides no more than 6 months waiting period for preexisting conditions.
  
  
• Guaranteed Renewability: All health care service plans contracts offered to a small employer shall be renewable with respect to all eligible employees or dependants at the option of the contract holder or small employer except for nonpayment of premiums, fraud, misinterpretation on the part of the contract holder or small employer.
  
  
• Rates and Rate Distinctions: Establishes risk categories of no more than 110% or less than 90% of the plans applicable standard employee risk rate and standardizes the factors determining rate such as age brackets, geographical, etc.
  
  
• Minimum Employer Contribution: Establishes a minimum of 50% employer contribution for employee priced plan.

Individual Plans
Some employers choose individual plans for their employees and themselves. Each individual is underwritten according to their individual medical history. A disadvantage of this form of coverage is that the employer is not given credit for providing an employee health plan and loses control of the benefit.