as small and medium employers evaluate health benefits they consider two approaches: group insurance or an employee for individual health insurance (also known as premium refund) refund. One of the main deciding factors is the cost. 
This article describes five steps to the cost savings from group to calculate insurance premiums against reimbursement.
Step 1 :. Employees Census information collected
First collect employee census information such as name, age, zip code, family size and annual income
Step 2: Collect estimated cost of health insurance for every employee
[collect estimated with the employee census data, first individual cost of health insurance for each employee. Sample rates can by a health insurance broker to find a premium refund provider or national health insurance marketplace. (Ex: www.healthcare.gov or www.coveredca.com)
Next, for each employee to calculate the premium tax credits. Use an online calculator tax credit (like this one), to calculate the discounts for each employee is available. Remember, employees are eligible for a premium tax credit into account when access to employer sponsored no-coverage have health insurance, and if they make less than 400% of the FPL (which is up to $ 46,680 for an individual and up to $ 95,400 for a family of four in 2014).
to get the net cost of individual health insurance to calculate the premium tax credit from the health insurance premium costs.
employees subtract Step 3: Collect group health insurance for each employee costs
If the company has an existing group health insurance plan, use these rates. If the business does not have an existing group health insurance, using an average group health insurance rates for your state or working with a broker health insurance quotes
Step 4 :. Estimated tax penalties for the business, if applicable
if the business has fewer than 50 employees, do not skip this step are as an employer mandate and tax penalties.
If the company has more than 50 full-time positions, the next step for the employer shared responsibility is to calculate charges no groups offer health insurance. The penalties begin in 2015; However, there are transition relief for companies with 50 to 99 FTE. For detailed instructions, see:
Step 5: Analysis of results
Now it is time to analyze the results. If the total cost of individual health insurance (plus any tax penalties of step 4) is equal to or less than the total cost of the group health insurance, the change to the individual health insurance and premium refund speaks for itself.
For cost savings chart
Here is an example of cost savings chart for a 10-person company with five individual employees and five employees with families.
| group health insurance month premiums | $ 10.750 |
| Individual health insurance month premiums | $ 2,999 |
| shared responsibility Payments ( only for employers with 50+ FTE employees) | $ 0 |
| Monthly savings with individual health insurance | $ 7,751 |
| year savings | $ 93.012 |
| saving% | 72% |
in the above table, the cost analysis factor not. in the contribution percentages for the companies and employees
continues to take a step, the analysis, take into account the costs for both companies and employees. Here is an example of the same 10-person company. In this example, both the company and employees are saving 72% on cost of health insurance for the same or better coverage on the individual market.
| business | employees | general | |
| Monthly charges | |||
| Individual Health Insurance & Premium refund | $ 2.100 | $ 899 | $ 2999 |
| group health insurance | $ 7,525 | $ 3,225 | $ 10.750 |
| Monthly savings with premium refund | $ 5,425 | $ 2,326 | $ 7,751 |
| annual savings with premium refund | $ 63.827 | $ 29.175 | $ 29.176 |
| saving% | 72% | 72% | 72% |
What questions do you have about the cost savings of group health insurance to individual health insurance premiums and reimbursement calculation? Leave us a comment below.
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