The short answer is “yes.” While small businesses with only one employee are usually not required to provide health insurance for their workers, they are allowed to offer it if they so choose. But there are some unique requirements for enrolling in group health insurance on such a small scale, which you should be aware of before you sign up. The better you understand how many employees you truly have, how small business health insurance works, and what policy options are available for the smallest entities, the easier it is to provide quality coverage for everyone in your workplace.
Before you look for small business health insurance to cover yourself and your sole employee, you first need to make sure that individual actually is your employee and that you don’t have any others. There is a strict definition of “employee” that insurance companies go by, when it comes to approving small businesses for group health insurance. One commonly overlooked rule is that a spouse does not count as an employee when it comes to health insurance.
According to the IRS, someone who works for you can be considered a common-law small business employee if you control both the work that they do and the way they go about doing it. This is true even if you don’t supervise them while they work. As long as you exert control over both the worker’s production process and the finished product, the person is your small business employee. This definition rules out most contractors, because while your business may specify what these individuals are producing for you, by IRS standards, you typically don’t have any oversight over how they do the job.
The common-law definition of “small business employee” specifically excludes spouses, even if they fulfill a similar role in your business to that of an employee. So if you own a business and your spouse is the only one who works for you, you will likely not qualify for small business group health insurance. In most cases, this does not apply to other family members.
This may seem obvious, but besides having one full-time equivalent, qualified employee besides yourself, your organization needs to fit the legal definition of a business. In 2015, former president Obama signed into law an amendment to the ACA, which states that “small employer” applies to employers with 1 to 50 employees. So by having one small business employee, you have met that requirement.
As for proving to insurance companies that you’re a business, certain documents can serve as proof. Some examples of documents that could help you get approved for small business group health insurance include:
Even with the knowledge that they can sign up with just one small business employee, many firms are hesitant to enroll in a group health insurance plan. What’s the point, you might wonder, of getting a small business health insurance plan for just two people? But as more and more companies are figuring out, there are a number of benefits to group health insurance plans for even the smallest businesses, including:
For more information on the benefits of small business health insurance for you and your staff, visit eHealth today.