GHP (Group Health Plan) Health Insurance (2023)

Think of how the economies of scale work – the larger the volume of products a company produces, the cheaper it is to make them. The same principle applies to GHP healthcare insurance, which is available to groups of people.

The insurance company can offer the coverage at a lower cost since they can spread the risk across the entire group. If you run an organization, you should consider GHP health insurance to provide coverage to your employees and their families.

What is GHP insurance?

GHP insurance is an insurance plan employees can obtain while working for employers or employee organizations like unions. Sometimes, it covers former employees for a while. But it is unavailable to individuals. Typically, both the organization and workforce split the premium costs.

Several types of GHP healthcare plans are usually offered by various insurance companies, which tailor their coverage to suit the needs of each of their clients. Some may provide tiered coverage that allows employees to pay for add-ons. And usually, it costs less to get treated by a medical service provider within the GHP network than out of it.

When a business has at least 20 employees, it must offer the same coverage to those 65 years or older and their spouses as it does for its younger workforce. 

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Who should enroll in GHP health insurance?

While many businesses can enroll in a GHP group plan, not all are legally obligated to do so. Generally, any small company with fewer than 50 employees doesn’t have to provide health insurance to its employees or their families and there is no tax penalty to pay for not doing so.

However, those organizations with 50 or more employees who work full time (30 hours a week or 130 hours each month) must offer health insurance to them and their families. If they don’t offer coverage to at least 95% of their full-time workforce, they will be required to pay a tax penalty. 

For employers, the money paid toward insurance premiums is tax-deductible and some businesses may qualify for additional tax credits. Employees who pay additional premiums can often reduce their taxable income by deducting those costs also.

What are the GHP Health insurance requirements?

Below are the criteria that businesses should meet and characteristics businesses must exhibit to obtain GHP healthcare insurance for their employees.

• There must be at least seven employees, including at least one full-time employee.
• Family members within a family business setting could be insured as employees, provided there is an employer-employee relationship among them.
• The business must be legally registered and must possess a GST number.
• There must be a 70% or higher participation rate for the organization to be eligible for group health plan insurance.
• Members of the group should be able to enroll or decline the health coverage on offer.
• Both the company and employees must agree to cost-share the insurance premiums.
• If employees are willing to incur additional coverage costs, they can also extend coverage to their family members and dependents.

Once your business meets the criteria for getting GHP health insurance, you can pick the best one for your needs.

Types of GHP Health Insurance

Three primary types of GHP health insurance exist.

Health Maintenance Organization (HMO)

HMO plans enable the covered employees to seek services from medical service providers within the GHP network. However, you can only get treatment from an out-of-network provider only in case of a severe emergency. So, it works best if you are within the service areas.

Generally, HMO plan healthcare providers accept a lower rate in exchange for a steady supply of patients associated with the GHP. So, insured parties will benefit from lower treatment costs with lower deductibles and co-payments. However, employees may have to pay out-of-pocket for out-of-network coverage.

The option is suitable for organizations with most employees concentrated in the service areas in areas with excellent medical service providers.

Preferred Provider Organization (PPO)

PPO plan service providers usually agree to charge GHP clients a specified rate, even if they aren’t within the network. So, patients can see whichever medical service provider they prefer, wherever they are, without obtaining a referral.

However, the flexibility comes at a higher cost. Employees need to prepare for the higher out-of-pocket expenses they will incur with this plan, including the yearly deductible.

This option works well for organizations with plenty of traveling employees.

Point-of-Service (POS) Plan

POS plans are a cross between PPOs and HMOs. Employees need a primary care physician to provide in-network care most of the time. However, they can be referred to a specialist out-of-network if necessary.

In most cases, employees will not need to pay deductibles for in-network services. But they may need to cater to co-payment costs. Usually, POS plans tend to be more expensive than HMO plans but cheaper than PPO plans.

POS may work best for organizations with employees who travel some of the time for work or those with many branches, some of which may be out of state.

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Organizations Should Consider GHP Health Insurance

If you have a business and are shopping around for affordable health insurance for you and your employees then GHP health insurance may be your only option as it is often required by law. GHP health insurance will help you reduce your taxes while ensuring your employees and their families are covered. There are plenty of options you can choose from, depending on what kind of business you run, its size, and the tasks your employees perform.

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