Federal law extends certain protections to employers seeking to buy health insurance for themselves and their workers. Illinois has enacted reforms to expand some of these protections. Generally, small employers are those that employ 2-50 employees. Please note, however, that the definitions of small employer and employee are somewhat different under federal and state law.

Do insurance companies have to sell a small employer health insurance?

• With few exceptions, small employers cannot be turned down. This is called guaranteed issue. If you employ at least 2 but not more than 50 people, health insurance companies must sell you any small group health plan they sell to other small employers if the employer group meets the participation requirements. They can also require you to pay a share of your workers’ premiums. If you are buying a large group health plan for 51 or more employees, your group can be turned down.
• Your insurance cannot be canceled because someone in your group becomes sick. This is called guaranteed renewability and it applies to group plans of all sizes. Insurers can impose other conditions, however. For instance, they can refuse to renew your coverage for nonpayment of premiums or if you commit a fraud, or if they are discontinuing that health plan or if they are withdrawing from the small employer market. In the case of discontinuance, they must give you a chance to buy other plans they sell to groups of your size.

Can insurance company charge more because of the group’s health status?

• Illinois limits how much premiums can vary due to a small group’s health status. Even with these limits, however, premiums can be significantly higher if someone in your small group has a serious health condition. In addition, premiums can vary based on age, industry, and other characteristics of those in your group.
• Illinois also limits how much small group plan premiums can increase at renewal because of claims experience.

If you are self-employed with no other workers, you are not eligible to buy a group health plan on your own (though you may be able to join another group health plan through a family member). Therefore, the laws that protect employers’ access to group health plans do not apply to you. Your access to health insurance is protected by the laws that apply to individuals. If you are self-employed and buy your own health insurance, you are eligible to deduct 100% of the cost of your premium from your federal income tax.

For self-employed the biggest problem is that they might have no coverage for work-related injuries. Individual insurance may not pay benefits for accidents at work, since they should be covered by Workers’ Compensation. However, a great number of small employers voluntarily exclude themselves from WC. In this situation, the best solution would be to purchase individual insurance offering coverage for work related accidents.

Every small employer has unique health insurance needs. That’s why it is important for you to make an informed decision about the health insurance coverage you choose for yourself and your employees.

The best way to begin shopping for health insurance is to find reputable insurance agent to help assist you. You can search for an agent in such organizations as Trusted Choice or Better Business Bureau. Agencies listed in those organizations belong to most valued in insurance market.

If you already have insurance, but you want to see if you can get better rates, and especially if you are anticipating a rate increase, it is usually a good idea to begin shopping 60 to 90 days before your policy’s anniversary date (anniversary – because health insurance policy is not annual or semi-annual; it is active as long as we pay for it. However, usually every year there is an anniversary connected with premium adjustment).

Typically insurers give you 30 days prior notice of any change in your premiums. When an increase is received, many employers decide to shop for lower cost coverage. Unfortunately, this 30-day window does not always allow enough time to switch companies because of all the paper work involved.

When applying for coverage, you will need to provide the representative with information about you and your employees:

• Current Employee Census – a listing of your employees, including their age, gender, marital status and any dependants to be covered;
• A copy of the summary of your current coverage;
• A confirmation of your employment;
• Disclosure of any significant current or recent health conditions.

The representative will then submit this information to the insurance company to determine the ‘proposed’ standard premium. Because it is extremely expensive and time consuming for insurers to underwrite policy, they usually only give ‘proposed’ rates to see if you are interested. Therefore, you should not quit your previous coverage.

The characteristics of a good health insurance plan.

• A coverage limit high enough that it won’t likely ever be exhausted, even for the most catastrophic medical expenses – if a small difference in price is caused by difference in lifetime policy limit: $5,000,000 and $3,000,000, it’s worth considering which plan to choose.
• Annual deductible and out-of-pocket expense we can afford – choosing a plan with a $5,000 deductible and 80% co-insurance just because it is inexpensive, is not necessarily a wise decision. You need to analyze your financial situation asking yourself this question: will we be able to pay $6,000 or $10,000 for medical treatment?
• No dollar limits on types of expenses, such as dollar limits on daily room charges or dollar limits for types of surgical procedures – there are health insurance plans that except for the deductible and out-of-pocket expenses limit have additional deductible, e.g. for emergency care. These additional expenses may lower the premium.
• Freedom to see specialists without referrals – PPO plans let the insured see a specialist without physician’s referral, whereas HMO’s don’t.
• Worldwide coverage – a lot of plans offers full coverage only in the residence territory and only emergency coverage outside it.

Medical expenses are besides liability for third party’s bodily injury, house destruction, disability and premature death one of the most common reasons for serious financial problems. Therefore, proper protection should be everyone’s priority. The best way to avoid enormous medical bills is to combine wellness care with proper health insurance.