stack of blocks depicting health coverage

What Is Group Health Coverage? Here's Our Complete Guide

Business owners across New Jersey struggle to remain competitive and profitable. It’s hard to keep good employees and keep costs low at the same time. Group health coverage can help you do just that.

Yet, only 41% of small businesses with less than five employees offer insurance. Larger companies with less than 500 employees, about 61% offer insurance.

You can set your business apart by offering top-tier benefits like health insurance to your employees. Ready to learn more?

Read on to find out what group health insurance is and how it can help your business.

What Is Group Health Coverage?

Group health insurance refers to one health insurance policy for a group of people. The group is usually a small business or a trade organization.

How much does group coverage cost? It’s usually lower than if you or your employees were to get individual coverage. Insurance rates are based on risk to insurance companies.

Think of risk like getting a loan from a bank. People with good credit scores will get a better interest rate because they’re more likely to pay the loan back than someone with a bad credit score.

Banks want to protect their profitability, so they’ll charge more for people who are a higher risk. Health insurance companies also calculate their level of risk and profitability.

With individual insurance, there is a higher level of risk to the insurance company, especially if the individual is older. They’re more likely to need to use their insurance more often.

That will result in a higher premium for the individual. Group health coverage allows insurance to absorb risk between more people.

So, in a group of 10 people, some people may need to use their coverage more than others. Since the risk is spread out among more people, insurance companies are able to charge less.

Most group plans have a 70% participation threshold. That means that 70% of your group must participate in the plan. A business with 10 employees (including yourself) must have 7 people take part in the plan.

Are You Required To Provide Health Insurance?

Small business owners usually agree that health insurance can be a big benefit and lower employee turnover. That doesn’t mean that they’re going to provide group health benefits.

Are you obligated by law to provide health coverage? It depends. The Affordable Care Act says that businesses with less than 50 employees don’t have to provide coverage. Those with 50 or more employees do need to provide insurance to employees.

Just because you don’t have to provide health insurance coverage, doesn’t mean that you shouldn’t provide insurance. There are hidden costs to your business by not providing group insurance coverage to your employees.

For starters, how much does employee turnover cost your business each year? One study found that employee turnover costs about $15,000 per employee.

You can retain employees by providing health insurance coverage. Your employees are likely to leave for another position that offers that benefit.

You also need to account for sick days and lost productivity. Employees with health insurance coverage are happier, healthier and more productive.

Finally, there are potential tax credits and deductions for your business. That can lower your tax burden while creating a more productive workforce. In other words, you can be more profitable by investing in group health coverage for your business.

Shared Costs With Employees

When you buy group health coverage, you don’t have to shoulder the responsibility for the entire cost of coverage alone.

Most businesses will share the costs with employees. The percentage that your business pays and your employees pay will depend on a few factors.

You’ll want to weigh the premium costs, the number of employees you need to cover and your eligibility to receive tax credits. There is no set number, but it is something that you and your insurance partner can discuss.

Finding Group Health Coverage

Is your business ready to provide group health coverage? How can you provide the best coverage to your employees? Here are some tips to find the right group health insurance plan.

Gather Your Paperwork

You’ll need to get your paperwork together to apply for group insurance. You’ll need your business name, EIN, industry code, address and payroll records (Quarterly Tax and Wage Report).

A list of employees needs to be part of your application, too. That list needs to have each employee's name, home zip code, gender, birth date, tobacco usage and participation in other health insurance.

Work with a group health insurance agent to find your options. They’ll take your information, look for plans on your behalf and go over your options with you.

You also want to educate your employees on their health insurance plan. Most people know they have coverage, but a very small percentage of people fully understand what is covered or not.

Take the time to educate your employees on the basic terminology. They need to what a deductible is, their monthly premium, their level of coverage and the doctors covered in the group insurance network.

Get Health Insurance For Your Business

Your employees are your company’s biggest asset. Doesn’t it make business sense to not provide health coverage as an employee benefit?

You could lose more money by not providing coverage in the form of lost productivity and employee turnover.

Group health coverage is a way to provide an affordable health insurance option to your employees. You’ll want to bring in the expertise of an insurance agent who can help you find the best group health coverage for you and your employees.

Contact us today to find out about how we help New Jersey businesses with their health insurance needs.

doctor with crossed arms holding stephoscope

Out-Of-Network Health Benefits: How They Work

Watch Our YouTube Video Here:

Hi everybody! It’s Kate Plageman with Central Jersey Insurance. Most of us have a health plan that has good in-network benefits.

If you do have a plan that has an out-of-network benefit feature, it’s really important that you understand that there can be a lot of hidden costs.

I’m going to give you an example of a claim and how that was likely processed with a typical direct access product with say Horizon Blue Cross Blue Shield of New Jersey.

Say you’re in the hospital and you see a doctor that is out-of-network, does not take any insurance. A lot of orthopedics, dermatologists, psychologists, psychiatrists won’t take any insurance whatsoever. That’s where the out-of-network benefit comes into play.

So, as an example, you go into the hospital, you see a doctor, you incur a claim, say it’s $5,000 total. That claim will come through to the carrier, in this case Horizon, and be discounted to what is considered to be reasonable and customary on an in-network level, okay?

So, that $5,000 will be discounted to say, $3,000. That’s considered reasonable and customary in-network. That difference between the $5,000 and the $3,000 is on you to pay and you will be responsible for that difference.

The out-of-network provider can balance bill you that. That $3,000 that’s left will then be subject to the out-of-network deductible, which is most commonly separate from your in-network deductible.

So, that usually is around $2,500. So, that $3,000 is now $2,500 on you, So, that $3,000 is now $2,500 on you, and then that difference of $500 will be paid at the coinsurance rate which is usually between 60% and 70%.

So, you may have a benefit of a couple hundred dollars out of that $5,000 claim, yet the provider can balance bill you all of that difference.

So, it’s really, really important that you understand how those benefits work before you get involved with out-of-network providers. Also as a footnote to that, if you have a plan that has out-of-network benefits, the premium is significantly higher than those that have in-network benefits only.

So, it’s just a little tip that I wanted to share with you, buyer beware.

Many professionals with gainful employment have group health plans that offer in-network benefits. This means that in-network health care providers have agreed to discounted rates for those covered by specified insurance companies.

Did you know that some plans also have out-of-network benefits? When seeing an out-of-network doctor, you may still receive a discount from your insurance provider, but won’t get a discounted rate on behalf of the doctor.

Keep in mind there are other hidden costs and complexities that can leave you with a hefty out-of-pocket bill to pay. In this post, we’ll break down the difference between in-network and out-of-network benefits and discuss some situations you may encounter.

Why Don’t All Doctors Accept All Insurance Plans?

There are a number of reasons all doctors don’t just accept all insurance plans. Most of the time, it comes down to cost, meaning the doctor believes that the rate offered by the insurer is not enough to warrant their participation.

Some doctors prefer to keep their networks small, working with only a few, or sometimes one (or no) insurance providers. This helps them simplify operations and increase leverage with patients and potential providers.

Another reason is that insurers may have a limited number of provider slots available, whether they are based on the total number of doctors or the services they provide. For example, they may already have enough in-network orthopedists, or they can’t take on over 100 individual practices and have hit their limit.

That said, several states have “Any Willing Provider” or “Any Authorized Provider” statutes which allow any healthcare provider to be an in-network provider if they meet certain requirements. This prevents insurers from blackballing providers and limiting access based on several factors. Depending on the state, these laws can be broad or limited in scope.

Accepting Insurance vs. In-Network

There’s also a difference between a physician “accepting your insurance” and them being an “in-network” provider.

Often when you call a doctor’s office and ask if they accept your insurance, they will tell you they do. But it’s important to dive a little deeper.

A doctor may accept your insurance carrier, Selective for example, but not your specific plan under Selective. This would make them on out-of-network provider vs. in-network.

This is an important distinction to make before making appointments and seeing particular doctors.

Emergency Care

If there is an emergency and you have insurance, you should have access to out-of-network services. Insurance and healthcare providers can’t require you to pay a higher copayment or coinsurance if you receive emergency care from a hospital not in your network. This is thanks to the Affordable Care Act.

The same applies if you don’t have insurance, and hospitals can’t refuse to give you emergency care. This is all because of the  Emergency Treatment and Labor Act (EMTALA). If you’re still concerned about costs, you might go to an urgent care center of the emergency room.

What Should You Do?

The most important thing to do if you’re not sure about in-network or out-of-network benefits is to speak with customer service for your insurance provider. They can check for you if a doctor you’re looking to see is covered under your current plan.

Many insurance providers also have online portals where you can see which doctors are covered under your plan. It’s also recommended you confirm specific details with your doctors.

Still Confused?

Thinking of seeing a doctor that is out-of-network or still feeling confused? Before you take the leap and see a doctor you’re unsure of, click below and download our helpful guide to better understand the hidden costs.

Download Our Guide

two smiling workers bumping fists over their group benefits plan

Group Benefits Plan: What To Offer Your Employees

Employee benefits are insurance plans that employees gain through a business they work for.

They provide these benefits on a group plan that covers all employees in the company. This costs the business money, but it can provide a significant return on investment. By paying a premium, an employer typically gets insurance at lower rates compared to an individual employee finding their own coverage on the market.

Using group employee benefits, companies can attract the best, highly qualified workers to their business in a competitive job market. With a group benefits plan, businesses can reduce the amount that they will pay to cover individual employees. They are often customizable, so the plan can include the key areas that the employer wants to cover and that are attractive to the team.


Benefits Of Group Benefit Plans

For Employees

There are benefits to group insurance for employees. They include:

  • Gaining standard coverage without having to prove eligibility or affordability.
  • Lower costs compared to an individual searching for insurance coverage on the market.
  • Ability to share costs with the employer, leading to cheaper plans for each individual.
  • Access to benefits that are not available outside a group benefits plan including recreational options exclusive to workplace employees.

For Businesses

Group benefits also provide significant benefits to the employer or the business owner, including:

  • Protection of the investment made in their employees. If an employee gets injured or falls ill, expenses can be covered to ensure they can return to work as quickly as possible.
  • Improved levels of tax compensation. Benefits are paid before tax is taken from income, providing more money to employees.
  • Helps improve productivity by eliminating outside burdens for staff.
  • Positive employee satisfaction, commitment and loyalty to your business because they feel they are taken care of.

Primary Benefits Available

There are some standard options businesses can provide to their employees on a group benefits plan. You can watch our video summary below or continue reading:


Health insurance offers support to employees who are dealing with health issues including long-term conditions. It guarantees that employees can get the treatment they need for different medical conditions. It improves their quality of life and ensures that they can get the support they need to be a vital member of the business team. 69% of private industry workers can access this through their employee while it is available to 89% of local and state workers.


This is one of the most sought after benefits according to employees. Dental allows employees to get regular oral checks and hygiene treatments. It also ensures that they can get the treatment they need for painful conditions such as a root canal.


Issues with vision can severely impact an employee's ability to work. Eye strain can cause pain and headaches that impact an employee’s level of productivity, ability to work and their general level of wellbeing. With vision insurance, employees can gain treatment including glasses and contact lenses. Sometimes, coverage may also provide for the costs of permanent solutions including laser surgery.


This benefit provides support for the people whom employees leave behind. Life insurance is an attractive possibility for employees who have families and want to make sure that their descendants receive support if they suddenly develop a terminal illness or suffer an accident. 57% of employees working in private companies can access life insurance benefits from their employer.


Ensures that if an employee suffers from a disability while working for you, they can get the support they need for improved quality of life. This includes the cost of medical expenses, changes they may need to make to their home and the cost of long-term living.

Additional Benefits For Employees

Aside from the main options, there are a variety of other benefits that you should offer your employees.

This includes paid time off, or PTO. Paid time off can include anything from days where an employee is sick to time that they want to take on vacation. Typically, the employer will determine a set number of vacation days employees can take each year, which the benefit plan covers. If an employee wants to take further days, they may, but they will be without pay.

Certain businesses may include telecommuting plans in employee benefits, which come in the form of cell phone plans. It's usually the case where remote workers need to be in contact with the main business office or other colleagues throughout the day.

More businesses are now including wellness programs in group employee benefits to keep their work team healthy and fit. This leads to higher levels of productivity and ensures that job satisfaction improves as employees feel more comfortable and taken care of.

Childcare benefits are another popular option. Childcare can take the form of compensation for employees who need to take time off to care for their children. Alternatively, a business may also set up an on-site childcare system for parents who need options for care while they are at work.

Overall, group benefit plans provide financial advantages for both businesses and staff. They help boost morale and make a company more attractive to new employees. It can reduce staff turnover since employees feel safe and valued in their position. This means they have less reason to seek other opportunities, particularly if the benefits provide long-term support to their families.