Tools Plan Type/Price Range Generator Cost Estimator Related Topics Preparing to Purchase Group Coverage

Budgeting and Cash Flow

• Percentage of payroll. Calculate an amount as a percentage of your total monthly and annual payroll that you could spend on group coverage.
• Per employee per month. Calculate how much you could spend per employee per month. Come up with a bottom-line maximum figure, without worrying about any variables such as employee contributions or dependent coverage. Based on your budget, you'll figure out those variables later.

In the tool box, see the "Plan Type/Price Range Generator" and the "Cost Estimator" to help you calculate how much various health plans are likely to cost.

• Monthly premium commitment. Most insurers require you to pay the monthly premium by the first of the coverage month. This means you would pay for April coverage on April 1, May coverage on May 1, etc. If you are buying coverage for the first time or replacing existing coverage, the insurer will likely ask for a month's premium in advance.
• Grace period. Most insurers offer a 30-day grace period for paying premiums. So, even if you pay a few days late, your group insurance plan will most likely not be cancelled. You may want to inquire about your insurer's grace period and notification policy regarding cancellation.
• Cancellation/reinstatement. If you are regularly late with your payments, your insurer has the right to cancel your group insurance policy. Most insurers have procedures for reinstating policies that have been cancelled due to insufficient payment. You may want to ask about your insurer's rules regarding cancellation and reinstatement.
• Premium increases. Most premiums are renewed annually, which means that the insurer can adjust the premium once a year. Some plans, though, allow the insurer to increase premiums every six months. By law, you must be given at least a 30-day notice of a proposed increase.