Group Insurance 101

One way Paychex Insurance Agency helps bring clarity to business insurance is through our Insurance 101 topics — providing business owners with quick information in plain language.

If you still have questions after reading our Insurance 101 topics, please call a licensed Paychex Insurance Agency Representative at 877-393-8868. We'll be glad to help you answer them.

What is group insurance?

Group insurance plans cover groups of two or more people — typically an employer, 2 or more employees, and their families. Group insurance is a particularly effective option for helping businesses attract qualified job candidates and reduce employee turnover.

What coverage is included in group insurance?

Depending on the needs of the business and its employees, group insurance plans can include a range of coverage including, but not limited to, medical, dental, vision, life, and long- and short-term disability insurance.

How does group insurance benefit small businesses?

As opposed to individual insurance, where employees pay separately for 100 percent of their own coverage, group insurance allows employers and employees to share the costs, with employers covering at least half of the premium cost for a single employee. Businesses who offer group health insurance are also eligible for state tax credits.

How does group insurance benefit employees with pre-existing conditions?

Due to the nature of insurance and risk, individuals with pre-existing conditions may be turned down for individual health coverage. Since group health insurance spreads the risk among a number of people, the potential risk to the insurer is lessened and individuals with pre-existing conditions are more often approved for health coverage.

Which is better, group insurance or individual insurance?

While group insurance is a popular and effective option for many small businesses, in some cases individual insurance may be the better choice. Our licensed representatives would be glad to show you which type of coverage may fit your needs best.

How much coverage do you need?

With many different types of group insurance offered through different carriers, it can be difficult to know exactly which plan will ensure that you and your employees have the appropriate coverage — without making you pay for benefits you don't need. Talk with a licensed Paychex Insurance Agency Representative at 877-393-8868, and we'll take your business size, location, industry, and more into account to help you understand the coverage you need, and how to get it.

What is the minimum number of employees required to participate in a group insurance plan?

In general, the necessary percentage of participating employees becomes lower with increasing business size, but specific group insurance participation requirements vary by state and carrier. Talk with a licensed Paychex Insurance Agency Representative at 877-393-8868 to find plans with requirements that your business can meet.

What's the best way to get a group insurance quote?

For a quote that's relevant to your particular situation, you should speak to a licensed representative. Paychex Insurance Agency Representatives will take all of your important information into account to produce an accurate quote, and give you the best possible understanding of your insurance options.

How difficult is it to select and manage a group insurance plan without help?

There are many obstacles that must be overcome in order to select a group insurance plan and keep it running smoothly.

You must first research carriers in your area, select plan offerings, obtain quotes, and compare the results to find coverage that fits your needs and budget.

Once a plan is chosen, the enrollment process begins, from submitting application forms to the carrier, to enrolling employees, and setting up payroll deductions.

Then, when the plan is in place, your business must continuously coordinate with employees and your carrier to stay on top of enrollment changes, remove terminated employees from coverage, and track eligibility of new hires.

There must also be regular communication with employees at different stages of the plan year, to notify them of "open enrollment" and provide enrollment assistance.

On top of it all, the business owner is responsible for making premium payments on time, staying compliant with IRS regulations, and setting up and administering a COBRA or state continuation program to employees who have lost coverage.

How can Paychex Insurance Agency help you with the group insurance process?

Our licensed representatives will discuss your situation and needs in-depth in order to help you understand your group insurance options. When you've chosen a carrier and plan and become a client, you will receive even more services to help you manage your plan moving forward. These include:

• A designated client service specialist.
• A welcome call and welcome packet with policy information and a guidebook.
• Setup of your new insurance account.
• Contribution calculation and initial deduction setup.
• Enrollment assistance.
• Reports that track employees' eligibility and enrollment status.
• Premium deduction management for new hires, qualifying events, or status changes.
• Coordination with your carrier.
• Shopping for alternative plans at renewal time.

How does payroll integration make it easier to manage a group insurance plan?

Integrating a group insurance plan with payroll makes it much easier and more efficient to manage.

Freedom from Administrative Responsibilities
Things to Do	Without Paychex Insurance Agency	With Paychex Insurance Agency and Paychex Payroll
Track eligibility of new hires	Employer	Paychex
Remember to notify employees when they are eligible for coverage and provide application	Employer	Paychex provides assistance.
Submit new applications to carrier	Employer	Paychex
Address any carrier issues with applications	Employer	Paychex
Remove terminated employees from coverage	Employer	Paychex
Check invoices to make sure employees have the correct coverage	Employer	Paychex reports provide assistance.
Make premium payments on time	Employer	Paychex*†
Administer POP	Employer	Paychex†
Administer FSA	Employer	Paychex†
Administer COBRA	Employer	Paychex†
*Availability of services may vary depending on carrier selection. † Additional fee.

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