Alabama Small Business
Health Insurance Plans 2023

The average price of a standard Alabama small business health insurance policy ranges from around $583 to over $1706 per employee per month based on; single or family, location, coverages offered, deductibles and more.

Though Alabama health insurance companies are legally required to sell all small business health insurance policies if a company meets the above-mentioned requirements, the cost of Alabama small business health insurance isn't limited.

The premiums for small business health insurance in Alabama can be higher, depending on certain key factors related to the group, such as the age, gender, and health status of the group; however, these higher premiums must remain within a certain limit.

To protect groups that are insured under small business health insurance plans, health insurance regulations in Alabama prevent policies from being canceled if one of the individuals who are insured under the policy becomes ill.

The monthly cost of small group health insurance in Alabama is as follows:

• Group plan cost depends on employer contribution and 20% of the insurance company's index rate.
• Individual plan coverage costs vary. There aren't any caps.
• For COBRA, costs range from 102% to 150% of group health rates.
• For HIPPA, premiums will depend on the selected plan.

In the State of Alabama, health insurance companies are required, by law, to sell group health insurance policies to any small business. Furthermore, the same small group health plans that are sold to other small businesses have to be offered to all eligible Alabama-based small businesses.

In order to be eligible for small group health plans, a small business must have a minimum of two employees, but no more than 50. It is important to note, however, that Alabama health insurance companies are allowed to mandate minimum participation requirements.

Due to this stipulation, a certain percentage of employees or members have to purchase the policy, otherwise the company can rescind Alabama small business health insurance plans.

If you are a small business owner in Alabama, you can purchase health insurance coverage through the Small Business Health Option Program (SHOP) or through a private insurance agent or broker. A reputable private agent or broker will do their due diligence.

According to Alabama Department of Insurance, Because of high costs and limited options, many small businesses struggle to offer health insurance to their workers, and the number of small businesses doing so has declined over time. In most states, a small business is defined to include at least one but no more than 50 employees.

The Affordable Care Act builds on a prior federal law - the Health Insurance Portability and Accountability Act, or HIPAA - to improve the accessibility, adequacy and affordability of health insurance for small businesses through a series of reforms. Many of the Affordable Care Act's reforms apply to small business health insurance but not to large businesses.

In 2010, the Affordable Care Act (ACA or "ObamaCare") was passed by the United States Congress and was signed into law by Obama. Following its passage, provisions of the law have continued to be phased in, and as of January 1, 2014, the majority of American citizens and legal residents of the United States are required, by law, to have qualifying health care coverage.

If they fail to have coverage, they are responsible for paying an annual tax penalty for each month they aren't insured, which is known as the "individual mandate".

The cost of the penalty for failure to have qualifying coverage is $95 per adult and $47.50 per child, or 1% of your total taxable income; whichever amount is higher - as much as $285 per family. In 2017, the penalty increased, and has continued to increase thereafter.

Qualifying Exemptions For The Individual Mandate

Individuals who meet one of the following are exempt from the individual mandate and the associated tax penalties in FL:

• Illegal aliens
• Jailed individuals
• Religious objections
• The cost of health insurance coverage is higher than 8% of your household income
• Those who aren't covered for less than three months during the calendar year
• Those who have hardship waivers
• Your income level is blow the 100% poverty level

If you're a small business owner in Alabama, you must provide your employees with insurance. This is a requirement that was put into place by the Affordable Care Act.

Referred to as the Employer Shared Responsibility provision, all employers must offer their employees at least one of the ACA-compliant Alabama small business health insurance plans, otherwise then can face fines of up to $2,000 per employee.

Alabama small business owners can purchase coverage for their employees through the state's Small Health Option Program (SHOP) exchange, or from a private insurance agent or broker.

Affordable Care Act Standardized Essential Health Benefits

As per the ACA, all qualifying health insurance plans must offer 10 standardized essential benefits.

Depending on the state, additional benefits may also be required. The 10 ACA standardized essential benefits are as follows:

1. Ambulatory patient services (medical care that is offered without being admitted to a hospital)
2. Emergency services
3. Hospitalizations, such as overnight stays and surgical procedures
4. Lab services
5. Mental health and substance abuse disorder services, including behavioral health treatments, such as psychotherapy and counseling
6. Pediatric health care services, including vision and oral care; however, adult vision and dental coverage aren't essential health benefits under ACA
7. Pregnancy, maternity, and newborn care, including before and after birth
8. Prescription pharmaceuticals
9. Preventative and wellness services, as well as management for chronic diseases
10. Rehabilitative and habilitative services and devices, including services and devices for injuries, disabilities, and chronic health conditions

Small Business Coverage Rules In Alabama

The following is an overview of rules that are related to health insurance coverage for small business owners in Alabama:

• Group Plans - With group plans, there is a maximum 6-month look-back/12-month exclusionary period for pre-existing health conditions for enrollees that do not have prior coverage. The benefits will vary and depend on the plan that is chosen.
• Individual Plans - For individual plans, the maximum look-back period is 60 months and the maximum exclusion period of 24 months for pre-existing conditions of employees that lack prior coverage. With individual plans, elimination riders are permissible.
• COBRA - Coverage under COBRA is available to employees of Alabama small business owners for 18 to 36 months, dependent on qualifying events. The benefits provided are the benefits that a previous employer provided, and pre-existing health conditions are covered.
• HIPPA - The benefits provided are based on the program that is selected. Coverage does not expire, and pre-existing health conditions are covered.

Standardized Alabama Small Business Health Insurance Plans

In order to make it easier to compare costs and benefits, the Affordable Care Act has designated all qualifying Alabama small business health insurance plans to be one of four metal colors, including Bronze, Silver, Gold, and Platinum.

Each of these designations is based on the average amount of health care costs that the plan will cover, which is illustrates at percentages of how much the insurance company will cover for health care, as well as the amount the insured will have to pay out-of-pocket.

All insurance companies that are participating in the federal or state health care exchange program must offer at least the Silver and Gold Alabama small business health insurance plans.

All four of the metal plans have a shared maximum out-of-pocked amount that the insured can be charged during any calendar year. The following table illustrates this information:

Guaranteed Issue

As per the ACA, individuals cannot be denied coverage or charged higher premiums because of their past health history, or their gender.

Additionally, look-back and waiting periods cannot be imposed. Additionally, policies are effective when they are issued and all coverage is renewable if the individual chooses to renew the policy.

However, plans can be canceled if the individual fails to pay their premiums or commits fraud.

A premium is the amount the insured must pay out-of-pocket in order to maintain their health insurance policy. The premiums that are charged for any of the qualifying metal plans can be based on the following:

• Age of the individual
• Whether or not the individual uses tobacco
• Where the individual lives, based on a rating area
• The number of family members who will be enrolling

While there are several types of health insurance plans to choose from, the following plans are the most popular among FL small business owners:

Health Maintenance Organization - Simply known as an "HMO", this type of plan offers a variety of health-related services via a network of health care providers and hospitals that exclusively contract with the HMO, or who agree to offer their services to members of the HMO. Employees who participate in this type of plan usually have to choose a primary care physician (PCP), and receive most of their care from this physician. If a specialist is needed, the PCP will recommend one that is affiliated with the HMO.

Preferred Provider Organization - More commonly referred to simply as "PPO", this type of health insurance plan is the most common among Alabama small business owners. The insurance company provides a preferred list of health care providers, and employees must receive their medical care from the doctors and hospitals on that list for their claims to be paid at the highest level possible - but they also have the flexibility to see any other provider anywhere in or out of state.

Point-of-Service Plan - Known as a (POS), this type of health insurance plan provides access to health care services at a lower overall cost, but with fewer choices. Members can access care from in-network or out-of-network providers and facilities, but coverage is better when you stay in-network. POS plans may vary, but generally, plans are considered a blend of HMO and PPO plans - offering more flexibility than HMOs, but less than PPOs.

Health Savings Account - A health savings account (HSA) is a special type of bank account that allows participants in the insurance plan to save money that can be used specifically for the medical care they require in the future. HSA-qualified health insurance plans are usually PPO plans that are specifically designed to be used with an HSA.

Indemnity Health Insurance - This type of health insurance plan allows members to control their own health care and to visit any doctor or hospital they choose. The insurance company would then pay a pre-determined percentage of the total charges for the services that were rendered. Employees may have to pay for some types of services up-front and then they can submit a request for reimbursement with the insurance company.