STATE OF MEDICAL INSURANCE
FOR SMALL BUSINESS IN MINNESOTA
MINNESOTA INDIVIDUAL MEDICAL INSURANCE PROVIDERS
Blue Cross Blue Shield of MN Group Size: 2 Individuals or more Forms States Available: Must be a MN employer Highlights:
Consumer Directed plans: “Options Blue”, innovative suite of plans designed to work with accounts. Lower costs, increase control.
Open Access plans: Choose from plans that let employees see any doctor they choose – no referrals
Health Care Cost Calculator: An easy to use tool for employees to estimate annual health care costs.
Primary Care: Employees choose a clinic to coordinate all care and refer them to specialists.
Medica Group Size: 2 Individuals or more Forms States Available: Must be a MN, SD, ND or WI employer Highlights:
The choices include open access, care system and multi-state/national plans, tiered networks and consumer-directed HSA, HRA and FSA products.
For added value, the My Health Manager from MedicaSM Employer Resource Center makes it easy to get the business results you want. It provides innovative, integrated fitness and disease management at no extra cost to fully-insured employers. We also offer ancillary insurances — Dental, Life and AD&D.
Health Partners Group Size: 2 Individuals or more Forms States Available: Must be a MN employer Highlights:
HealthPartners has a wide variety of group medical plans that provide great care while saving time and money. With our flexible plans and convenient online tools, health care is no longer confusing. As your partner, no one works harder to help you get the most from your health plan.
Open Access Plans More doctors, more choices. Access to an open network of trusted, quality providers no matter where you live in the nation.
Empower Plans – HRA, HSA and FSA Flexibile money. Save or spend with FSA, HRA and HSA plans to gain more control over how you manage your health care dollars.
Distinctions Plans – with Benefit Levels Providers are offered at offered at different benefit levels based on quality and cost. Choose from different benefit levels based on your needs and budget.
Primary Clinic Plans Simplify. Easily coordinate all of your health care needs through your favorite doctor or primary care clinic.Here are a few key facts regarding Minnesota medical insurance
Statistics and more......(All facts are from the MN Dep. Of Health web-site)
- No employer in the state is required to offer health insurance benefits to its employees.
- In 2004, employers paid an average cost of over $6,000 per employee in claims and administration costs.
- Minnesota law provides small employers with some administrative flexibility in offering employee health benefits:
- As a result, all licensed health carriers offering coverage to small employers must, at a minimum, offer two kinds plans - a deductible plan and a co-payment.
- Qualified small employers also are assured "guaranteed issue" and "guaranteed renewal" for their health plans.
- Guaranteed issue means that a health carrier cannot deny coverage to a small employer based on the health status of one of its employees, a family member, or the overall group.
- Guaranteed renewal means that once a health benefit plan is sold to a small group, the health carrier must renew that plan regardless of the health or experience of the group.
- Who qualifies as a small employer?
- Any person, firm, corporation, partnership, association or other entity actively engaged in business (including political subdivisions of the state) is considered a small business if:
- 1. It employed an average of 2 but not more than 50 workers on business days during the preceding calendar year;
- 2. And it employs at least 2 current employees on the first day of the health plan year.
- Do health carriers have to guarantee small employers coverage/renewal if they request it?
- 1.Yes. Qualified small employers must be offered health benefit plans if certain criteria are met by the small employer if the small employer:
- A.Contributes at least 50 percent toward the cost of coverage for each eligible employee;
- B.AND at least 75 percent of the eligible employees who have not waived coverage participate in the plan.
- Percentage of employers offering Health Insurance in MN
Fewer than 10 employees 34.5%
11-50 employees 56%
- Waiting period percentages
No waiting period 25%
1-30Days 26%
31-6010%
61.9022%
More.. 17%
- Employer contributions for Health Insurance in ‘02
Single employee 87% employer paid
Family employee 67% employer paid
- Fully-Insured Health Insurance Market share in 2003
Blue Cross 33.8%
Medica 28.1%
H.P. 21.2%
P1 2.2%
Fortis/Assurant 1.6%
Federated Mutual 1.2%
UCARE MN .8%
Principal .8%
State Farm .7%
Other 8.8%
II. New medical products available to small business
1. Health Savings Account or HSA
HSA Plan Basics: An HSA is a tax advantaged way to pay for health care
An individual or group buys a high-deductible insurance policy to cover major medical expenses, and then sets money aside each month in a savings account - that’s the HSA part - to pay for everyday health care costs.
The account is owned by the individual, which means money not used one year can be rolled over into the next. If there’s a job change, the HSA moves, too. Money earned in an HSA accumulates tax-free, and whatever is withdrawn for medical expenses is also tax-free.
Common HSA questions and answers:
Who can get an HSA?
Anyone under age 65How much can one contribute annually to an HSA?
You can contribute in 2006 the amount of the deductible, up to $2,700 for singles and $5,450 for families, each year to your HSA. And if are 55 or older, you can put in an extra $700.Can any high-deductible health insurance policy qualify for an HSA?
Any high-deductible health insurance policy can qualify, as long as it meets the IRS requirements.What's the difference between the new HSAs and the flexible-spending accounts?
The biggest and most important difference is that your HSA balances can roll over from year to year and continue to grow tax-deferred.If my employer offers both, can an employee fund a flexible spending plan, too?
No. You cannot have an HSA if you use a flexible-spending account to pay health-care costs or if you have other medical coverage (say, through a spouse's policy). However, if your flex plan restricts reimbursements to wellness care (such as annual physicals) and vision and dental care, you can have an HSA too.What happens if I want to withdraw money for non-medical expenses after age 65?
A 10% penalty if you use the money for non-medical expenses before the age of 65.Can a couple who is planning to retire early open an HSA?
Anyone under age 65 can contribute to an HSA and contribute an extra $700 in 2006 if you're 55 or older. This catch-up contribution amount will increase by $100 per year until it reaches $1,000 in 2009.Do contributions to an HSA in any way affect one's ability to contribute to an individual retirement account?
No. Your HSA contributions won't affect your IRA limits -- $4,000 per year or $4,500 for those over 50. It's just another tax-deferred way to save for retirement.2. Health Reimbursement Account
HRA Plan Basics:
A Health Reimbursement Account (HRA) gives an employee the opportunity to manage their health care expenses in partnership with the employer.
Designed to offset the cost of a high-deductible health plan, an HRA is an arrangement where the employer reimburses employee for health expenses not covered by the health plan.
How It Works
- Every year, the employer puts money aside in an HRA to help pay for medical expenses.
- The employee does not pay taxes on the money, and manages the account themselves. Throughout the year, they can use the money in the HRA to pay for medical services and supplies that are not covered by your health plan.
- If the employee uses all of the money in their account, the employee pays the rest of the deductible out of their pocket. If they have unused money in the HRA at the end of the plan year, some plans allow to apply the balance to the following year or the employer retains the unused money.
- Because the funds in the employee’s account are owned by the employer, if they leave the company, you typically will forfeit the money in the account
105 Plan Basics:
- This approach allows firms to buy a lower-cost, high-deductible health plan and have it mimic the higher-cost coverage of a traditional fully-insured plan:
- A Section 105 Plan is under Internal Revenue Code; Section 105 for employers to reimburse employees for medical expenses (including health insurance premiums) not reimbursed or paid for by insurance.
- If the employer complies with the 105 requirements, the reimbursement amounts are fully deductible to the employer and not included in the employee’s gross income.
Benefits of a Section 125 Plan.
- A Section. 105 plans can put Sole Proprietors and Partners on equal footing with shareholders of Subchapter C Corporations.
- The spouse of the sole proprietor or partner needs to be employed in the business.
- The reimbursements would be paid to the spouse, rather than to the Sole Proprietor or Partner.
- They cover medical expenses incurred by the Sole Proprietor or Partner and /or any family member.
The following types of businesses are eligible:
- Sole Proprietorships
- Partnerships
- Subchapter S Corporations (but only for employees who own 2% or less of the Corporation. Subchapter S can sponsor a plan for other employees but the owner and spouse or family members may not participate.)
- Subchapter C-Corporations
- LLC`s and LLP`s
