It has become standard procedure for employers to place waiting periods on enrollment into their company’s group health insurance plan. These waiting periods can range from 30 days to 6 months, but are most commonly set at 90 days.

The justification for these waiting periods is the fact that every employee enrolled in a group health insurance plan is an additional expense to the employer. It is understandable for an employer to want to make sure they have hired employees who will be long-term assets to the company before obligating themselves to spend even more money.

The minimum contribution required from employers on behalf of those employees in their group health insurance plan is 10% of the Single premium. However, the average contribution is much higher and is closer to 50% of the Single premium. Employers cannot discriminate and are therefore required to contribute the same percentage for all employees.

Waiting periods are designed to protect the financial outlay of the employer, but can also be the cause for additional strain on a new employee’s financial situation. The additional delay before coverage can begin means that the employee will be required to obtain, or continue, coverage elsewhere. The only two options for such interim coverage are COBRA or an individual health insurance plan, neither of which is inexpensive.

COBRA is a continuation of benefits provision that allows an employee to continue, at his or her own expense, their group health insurance plan from a previous job. Very often the cost of coverage creates a problem for the former employee when they see, for the first time, the true monthly cost of their benefits. These benefits can usually be continued for up to 18 months.

Individual health insurance plans are much less comprehensive than group plans, and at a cost that is often significantly higher. The result is more money spent by the employee for similar benefits, or a much lower quality plan that is at least affordable. Neither of these options is attractive, but there is little else that can be done during the new employer’s waiting period.

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Florida Health Insurance Rate Hike

Florida Health insurance premiums have touched new heights! Every Floridian has the common knowledge that most annual health insurance contracts will endure a rate increase at the end of the year. This trend is not new and should be expected. Every time this issue pops up it seems as though the blame game starts. Floridians blame Health insurance companies; Health insurance companies blame Hospitals, Doctors and other medical care providers, Medical care providers blame inflation and politicians, well, we really don’t know what they do to help the issue… No one seems to be interested in finding the real cause of the health insurance premium rate increase. Most individuals, self employed, and small business owners have taken Florida Health Insurance Rate Hikes as the inevitable evil.

Hard Facts

What are various reports telling us? Why do Health insurance premium have annual rate increases?

Rate of inflation and heath insurance premium rate increase.

America’s health expenditure in the year 2004 has increased dramatically, it has increased more than three time the inflation rate. In this year the inflation rate was around 2.5% while the national health expenses were around 7.9%. The employer health insurance or group health insurance premium had increased approximately 7.8% in the year 2006, which is almost double the rate of inflation. In short, last year in 2006, the annual premiums of group health plan sponsored by an employer was around $4,250 for a single premium plan, while the average family premium was around $ 11,250 per year. This indicates that in the year 2006 the employer sponsored health insurance premium increased 7.7 percent. Taking the biggest hit were small businesses that had 0-24 employees. There health insurance premiums increased by nearly 10.4%

Employees are also not spared, in the year 2006 the employee also had to pay around $ 3,000 more in their contribution to employer’s sponsored health insurance plan in comparison to the previous year, 2005. Rate hikes have been in existence since the “Florida Health Insurance” plan started. In covering an entire family of four, a person will experience an increase in premium rate at every annual renewal. If they would have kept the record of their health insurance premium payments they will find that they are now paying around $ 1,100 more than they paid in the year 2000 for the same coverage and with the same company. The same item was found by the Health Research Educational Trust and the Kaiser Family Foundation in their survey report of the year 2000. They found out that the premiums of health insurance that is sponsored by the employer increases by around Read More »