Top Questions Employers Ask About Group Health Insurance
Jason Stolz CLTC, CRPC
Top Questions Employers Ask About Group Health Insurance — Every employer faces the same big questions when comparing health plans: cost, eligibility, participation, and plan design. On this page, Diversified Insurance Brokers answers the top questions small and midsize employers ask when choosing group health coverage, including level-funded, fully insured, and hybrid solutions.
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Request InformationCommon Questions Employers Ask
1. How do we qualify as a group?
Carriers define group eligibility by the number of W-2 employees, participation levels, and contribution requirements. If you rely on contractors, read can 1099s get group level funding to see how to stay compliant while supporting mixed workforces.
2. What are our funding options?
Employers can choose between fully insured, level-funded, and self-funded structures. Level-funded options blend predictable payments with refund potential. Learn more about this balance in why group level funding can make sense.
3. Can small groups access level-funded plans?
Yes, with proper documentation and participation. See examples of how this works in best group health insurance options for 2-person businesses and can small groups get health insurance refunds.
4. How do taxes work with level-funded coverage?
Payments for claims funding, admin, and stop-loss are generally deductible as ordinary business expenses. See details in level-funded health insurance tax benefits explained.
5. What’s stop-loss insurance and why does it matter?
Stop-loss is your safety net in a level-funded plan, protecting against large or unexpected claims. Learn how it works in understanding stop-loss insurance in level-funded plans.
6. What counts as “creditable coverage” and how does size matter?
Employer size affects participation and renewal rules. Review our resource on creditable coverage by employer size to ensure compliance before quoting.
7. How do we choose between plan designs?
It depends on risk tolerance, cash flow, and employee needs. Carriers offer both PPO and high-deductible options with varying flexibility. If you’re unsure, our advisors can model multiple scenarios to compare total expected cost.
Examples & Scenarios
Scenario A — 10-employee firm: A small company selects a level-funded plan to gain claim transparency. With solid participation, claims run below expected, leading to a small year-end surplus.
Scenario B — 4-person team: A micro-group opts for a fully insured plan for simplicity, then explores level-funded alternatives during renewal once participation stabilizes.
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FAQs: Top Questions Employers Ask About Group Health Insurance
Do small businesses qualify for group coverage?
Yes. Most states allow groups as small as two employees with proper payroll and contribution verification.
What if we have only one employee?
Some carriers require at least two, but alternatives like association or individual coverage may apply.
Can 1099 contractors join our plan?
Generally no—most carriers require W-2 employees. Contractors can use separate health coverage options.
Are premiums tax-deductible?
Yes. Employer-paid health premiums are typically deductible as ordinary business expenses.
How do we get started?
Provide your census, goals, and budget. We’ll model multiple carriers and funding types for a tailored comparison.
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