What’s your greatest concern with your group health insurance in Houston?
Some 37% of employers say that healthcare costs keep them up at night.
Key Takeaway
But the difference between paying 50% and 85% of employee premiums might make you rest a little easier. Choosing the right group health insurance plan can make all the difference in your costs.
Want to find out which plan option is right for you?
Keep reading to understand your options.
An Overview of Group Health Insurance in Houston
Group health insurance in Houston looks much like it does across the country, with a few exceptions.
Let’s start with the basics and look at the options for health insurance in this part of the country.
Options for Health Insurance Plans in Houston
Employer-Sponsored Insurance (ESI)
Employer-sponsored insurance (ESI) is the primary option for healthcare for Houston residents. It is the largest segment of health insurance coverage in the country.
According to the U.S. Census Bureau, 54.5 percent of the total population, 2022 had job-based coverage. Employers offer ESI as part of workers’ compensation packages.
Most employers cover 80 percent of single-employee premiums and 67 percent of family coverage.
Government Sponsored Plans
Medicaid and Medicare are the two most common government-sponsored plans that Houstonians take advantage of outside employer-sponsored plans.
What Makes Houston’s Group Health Insurance Market Different?
Houston is under Texas regulations and policies. This means that any changes to the state’s health insurance laws would apply to businesses in Houston.
In the summer of 2023, the Texas state legislature made a few changes to the state’s health care laws.
For example, pregnant moms on Medicaid will get health care coverage for a year, patients will get more detailed billing, and nurses will get help with student loans, according to Texas Tribune reporting.
Other changes include:
- New legislation prevents contracts that restrict choice or prevent price transparency.
- A bill that allows healthcare shoppers to save on out-of-pocket expenses when they find better deals outside their insurer’s network.
- A new bill requiring hospitals and medical facilities to issue plain-language and itemized billing.
You can read more about these changes here.
Additional Texas Health Insurance Resources
You can learn more about Texas state health insurance laws by exploring the following resources:
For more information or help with your healthcare questions, contact our team.
What Are the Most Common Group Health Insurance Plans?
If you’re shopping for group health insurance in Houston, it’s a good idea to familiarize yourself with your options. Consider the following.
What Is a Group Health Plan?
Group health insurance plans provide medical coverage to members of a given company. They may also offer supplemental health plans like dental and vision as a bundle or separately.
Groups work by spreading the risk across the insured population, allowing the insurer to charge low premiums. Members enjoy low-cost insurance, protecting them from unexpected costs from medical events.
What Should You Expect Group Health Insurance to Cost in Houston?
The average group health insurance policy costs around $7,400 annually for an individual, with employees paying about 17% of the premium. Families typically cost about $21,000 annually, with employees paying up to 27% of that premium.
Group members receive insurance at a lower cost because the insurer’s risk is spread out, as we mentioned earlier.
In most cases, a plan must have at least 70% participation to be valid. Premiums are split between the organization and its members, and coverage can be extended to members’ families and dependents at an increased price.
Employers are entitled to tax benefits for offering group health insurance to their employees. However, if you have 50 or fewer full-time employees, you must pay at least 50% of the insurance premium to qualify for a 50% tax credit.
But what about group plan types? Which one is right for your business?
Types of Group Insurance Plans
Fully-Insured Plans
A fully insured plan is one of the most common group health insurance plans. Fully insured plans involve more risk for insurance companies. They take on risks associated with healthcare costs and pass some of their own to businesses with an annual premium, partially paid for by employees.
Insurers use a variety of factors to calculate group health insurance premiums, such as:
Average age of your group
Size and health of the group
Employer’s claims history
Types of occupation
Type of coverage and add-on benefits
Self-Funded Plans
Insurance companies will cover the expense of the employee’s health costs in a fully insured plan, but self-funding plans ship that risk off to the employer. This tends to lead to more affordable rates, however. If your business is willing to take on the risk of paying out more for catastrophic claims, it could be the right option.
In most cases, large businesses with 1000 or more employees take this type of risk. However, small groups may also take advantage of self-funded plans.
A partially self-funded plan with stop-loss insurance could be a good fit, too. It allows you to reduce your risk while reaping some of the benefits of self-funding.
Level-Funded Plans
A monthly payment rate calculates level-funded plans. Insurance carriers use census information to determine the amount you’ll pay.
Claims allowances, fees, and stop-loss coverage premiums add up to this rate. The carrier typically adjusts the monthly level based on group performance every year.
PPO Plans
A preferred provider organization (PPO) plan is an employer’s most common insurance coverage. The Kaiser Family Foundation (KFF) revealed that 49% of individuals surveyed who have a employer-sponsored plan are under a PPO.
Under a PPO, employees can receive care from an in-network provider and have the insurance company pay for the total agreed-upon reduced rate. The employees then cover any copay or deductible that applies.
Conclusion
While there are other group health insurance options, the above gives you an excellent foundation to work with.
Of course, if you’re serious about saving money and ensuring that your employees get a good benefits package, you must work with a Houston health insurance advisor. We can help with that.
We offer many resources on our website, but to get the most out of your group plan, we recommend contacting us directly.
Get a quote for your business today and see how much you can save.
