Group Insurance

Find the Best Group Insurance Products for Your Client

Offering a portfolio of group insurance products is a great way to attract new clients and retain your current client base. A common approach among financial advisors is to start by helping clients secure a group health plan and later expand into other services such as life and dental insurance. Knowing how to find the right group insurance plans for clients is a great way to grow your business.

What is group insurance? 

A group insurance policy is a plan offered by a company to provide different types of coverage. These plans allow employees and owners to sign up for a group policy, as long as they are working full-time. Unlike individual insurance policies, group insurance typically offers a wider variety of plans with fewer underwriting requirements. For example, medical PPO plans are not generally available on the public market. 

There are many advantages to group insurance for both employers and employees. Business owners can write off their contributions on both state and federal taxes. They also become more competitive in the job market in terms of attracting and retaining talent. Group insurance is attractive to employees because it gives them increased access to benefits at competitive premiums. Companies today are expected to offer medical insurance as a part of their benefits package, and many also offer dental, vision, and life insurance plans. 

What types of group insurance policies exist?

There are several different types of group insurance plans. Here are a few most popular:

Group Health

Group Dental

Group Vision

Group Disability

Group Life

Group Annuity 401K

Contact us to learn more about group insurance plans

The larger a company is, the more likely it will offer most, if not all, of these products. Group health is a standard benefit offered, and all other policies are often offered as supplemental benefits, meaning that employee enrollment is optional. 

The amount that a company contributes to its group insurance plans depends on its market segment, determined by its size and industry. In general, larger companies have more complex needs and higher contributions. Before presenting group insurance to a client, make sure you understand the market segments and where they fit. Here is a breakdown of the different market segments:

Small group: 2–50 employees

The small group segment is primarily startups and small businesses. The enrollment process is typically more straightforward and much less complex. These companies will often offer only group health insurance and forgo supplement group benefits like dental and life insurance. Employers are not technically required to provide group insurance in this sector. However, they will have a more difficult time recruiting talent without offering group insurance benefits.

Mid-market: 50–150 employees

At this stage, the process begins to become slightly more complicated. You are typically dealing directly with the business owner. These businesses often have a group plan already in place and are looking for a better plan to fit their needs.

Large group: 150+ Includes larger corporations

The large group segment is primarily large corporations. At this stage, the process can be much more complex. These employers typically offer a variety of group benefits to their employees. You are often no longer meeting with the only business owners, but with attorneys and other internal decision-makers. 

What are the eligibility requirements to offer group insurance?

Employers must meet several requirements to be eligible to offer group insurance. First, there must be an employer-to-employee relationship in which there is at least one W-2 employee who works full time, defined as 30 or more hours weekly. This can also mean that the company has two owners who are both listed in the incorporation documents and actively employed full-time. Employers must also follow two rules to qualify.

They must contribute at least 50% towards the employee costs, and employee participation must be 75% or higher. Any uninsured employees who decline coverage will count against this participation percentage.

Both of these rules are waived during the open enrollment period. The contribution rule remains waived after that as long as the contribution remains consistent ongoing. The employee precipitation rule applies more towards the enrollment period as employees may come and go throughout the year. In the case of a 1099 employee, the employer can offer benefits to them but still must have at least one W-2 employee. Group insurance is not mandatory for those in the small market sector. 

Not sure if your client is eligible to offer group insurance? Ask one of our experienced sales directors.

How do I select the best group insurance for my client?

Finding the best group insurance for your client can be challenging due to an ever-changing market and a wide variety of products. A common mistake when shopping for group insurance is to focus on price alone. The price of a policy is not always indicative of the coverage provided. Keep in mind a client’s needs and the market segment they fit into.

Understanding your client’s needs and the different market segments is essential to finding the right group policies for your client. Some may have a self-practice or family-owned small business. Knowing which segment they fit into and their current benefit offerings can help you determine opportunities to find a better solution. Medical insurance is considered a tool to benefit your client, especially given the costs today. The client should understand the many benefits of offering group insurance, such as employee retention and access to highly desirable PPO plans. The quality of the plan your client chooses may directly impact their enrollment rates. Working with a broker can help you compare policies and benefits from different providers and weigh out the options more easily. EMG is a one-stop-shop for anything from enrollment to account maintenance, and we make sure the process is done efficiently. We also have an individual group insurance department available should that be an option the client wants to pursue.

Should I buy group insurance through a brokerage general agency?

Working with a broker can help you compare policies and benefits from different providers and weigh out the options more easily. A brokerage general agency can help you save time and access the best carriers. The group insurance market changes year-over-year, and providers are constantly adding new products and benefits. 

Working with a brokerage will also help you after the sale. It can be difficult and tedious to get support directly from an insurance carrier, but brokerages are well-equipped to offer full-service support, including:

Front-end sales support 

  • Help to tend to the needs of the employer
  • Knowledge of which relevant and qualifying questions to ask
  • Policy quotes 
  • Enrollment assistance

Back-end support

  • Employee enrollment additions and removals
  • Filing claims
  • Policy renewal support

How do I find the best group insurance brokerage general agency?

When shopping for group insurance policies, you want to find brokerage agencies that understand and offer a wide range of group benefits. That way, if your clients want to offer additional benefits beyond health insurance, you already have a broker behind you. Start by asking your network for referrals. You could also connect with NAIFA, a reputable nonprofit association of insurance brokers and financial advisors.

When prospecting group insurance brokerages, be sure to look for these qualities:

  • Make sure you walk away with a good feeling about who they are, and that you trust that they will do what they say they are going to do.
  • Make sure they can provide you with the services you need.
  • Look for someone that will go the extra mile for you and always picks up the phone.
  • Look for brokerages with a strong understanding of the market and the products your clients need.
  • They respond quickly and are attentive to your questions and needs.
  • Someone with back-office support to help throughout the life of the insurance policy.
  • You want a brokerage firm with a good team, not just a good salesperson.

Frequently asked questions about group insurance.

Do group insurance policies cost more than individual plans?

Traditionally, yes. 

Are group insurance contributions tax-deductible? 

Business owners can write off the amount they contribute towards employee plans on both state and federal taxes. 

Are employers required to offer group insurance to their employees?

Businesses in the small group market sector are not required to offer group insurance.

Are employers required to pay for all of their employees’ group insurance?

No, the employer contribution must remain consistent amongst all employees. There can be no discrimination, and the contribution levels need to be the same. For ancillary benefits, an employer can classify employees under different categories and then pay additional contributions for each category. 

EMG can help

As a brokerage general agency, EMG Insurance Brokerage handles everything from submission to the commission. Our relationships with over 30 carriers allow us to help choose the best group insurance products for your client. We will walk you through the process and help you deliver customized solutions for each client.

We have a dedicated group insurance department ready to help you throughout the life of your policy. Whether your client is purchasing a policy for the first time or needs help managing enrollments, we are here to make the process seamless.

Connect with us by phone, online, or in-person and schedule a consultation with your sales director today on how to grow your business.