Small group health plans in Hawaii operate under the guidelines of the Affordable Care Act (ACA). An important metric for determining eligibility is the Full-Time Equivalent (FTE) calculation, where an employee who worked at least 30 hours per week during the preceding calendar year is considered an FTE. Part-time employees are included in this calculation. For instance, if three employees each work 20 hours per week, the total FTE count is 2.
Companies with a shared owner or a related connection are generally treated as a single group. This involves combining employees for the purpose of determining the group size.
To comply with the Hawaii Prepaid Health Care Act, it is crucial for employers to select a health plan that caters to the needs of their employees. All the available plans ensure compliance with this Act and offer benefits for services received from participating providers.
Enrollment deadlines are significant. For the group plan to commence on the first day of a month, the enrollment must be received on any business day (Monday through Friday) on or before the 10th of the preceding month. For example, enrolling by October 10 ensures the plan starts on November 1, while enrolling on October 11 means the plan starts on December 1.
Group health plans serve as a valuable resource for employers or organizations aiming to provide affordable health care coverage for their employees or members. The key advantage lies in the lower premium costs, attributed to the spreading of the insurer’s risk across a larger pool of individuals. This, in turn, allows for more affordable coverage compared to individual plans.
For small businesses, the option to purchase small business health insurance plans is beneficial. Tailored for companies with 1-50 employees, these plans offer cost-effective coverage for a limited workforce.
Various types of small employer group health plans are available:
- Health Maintenance Organization (HMO): HMO plans provide extensive coverage with relatively low out-of-pocket costs. However, they often require care to be received from providers within their specific network, and specialist visits may necessitate referrals.
- Preferred Provider Organization (PPO): PPO plans offer flexibility, allowing members to choose from a broader range of health care providers. While there may be a network, members have the option to see out-of-network providers at a higher cost. PPO plans typically have higher premiums, and referrals are not required for specialist visits.
- Point of Service Plan (POS): POS plans combine features of both PPO and HMO plans. They are cost-effective compared to PPO plans but more expensive than HMO plans. With a POS plan, members can see out-of-network providers, but a referral from a primary care physician is needed for specialist visits.