Wondering if your small business has enough people to qualify for group health insurance? See more here.
Group health insurance can often be less expensive than individual plans that offer the same benefits and coverage options. But not everyone qualifies for group coverage plans. If you have a small business, you’ll want to determine whether you qualify for group health insurance before you try to apply for group coverage. Here’s what you need to know about group health insurance, so you can get the right group coverage and plan for your needs and the needs of your employees.
The number of employees matters
In order to be eligible for group health insurance, a company has to have between one and 50 employees. That is considered a small group, and means you can apply for group coverage instead of individual. If you have more than 50 employees, you’ll need to:
- apply for large group coverage
- meet group coverage reporting requirements
- meet minimum group health insurance standards
A lot of businesses have fewer than 50 employees, and they can get group health insurance through the SHOP marketplace. To qualify, though, you’ll also need to make sure you have a work site or office in the state where you’re applying for insurance, even if you only have one qualifying group coverage employee there.
The type of employees matters
One of the employees on the group health insurance plan can be the employer or owner, but you have to have at least one other employee who is not an owner. Even one other employee counts for the group coverage designation. Understanding the type of employees needed for group health insurance matters, or your health insurance application for group coverage could be denied.
For group health insurance approval, you need at least one employee who is:
- Not an owner or employer
- Not a spouse of an owner or employer
- Not a family member of an owner or employer
- Not a partner of an owner or employer
- Essentially, completely unrelated to any owner or employer
If you don’t have at least one employee who meets this criteria for group coverage, your business may not qualify for group health insurance. That can make it harder for family-run businesses to get coverage, as they might need individual instead of group health insurance. That can come with higher rates than many group coverage options.
There are some other requirements
An employee who is part of the group coverage pool for insurance purposes has to work for you on a full-time basis. You can offer group health insurance to part-time employees, but you don’t have to. They won’t help you add to the group of qualifying employees for group health insurance. Instead, to get group coverage your employees will need to be:
- Full time (which is categorized as working for you at least 30 hours per week)
- Not part time (working for you less than 30 hours per week)
- Not seasonal (working for you only during certain times of the year, even if they work more than 30 hours per week during those times)
In short, you can offer group health insurance to part-time and seasonal workers if you choose to. But they won’t count toward the employees you need to have in order to qualify for group coverage. You also need to enroll at least 70 percent of your uninsured employees. If your employees have other individual or group health insurance coverage, they don’t count toward the 70 percent rule.
You should also know of one other important issue. You can enroll from November 15 to December 15 in any year, and the 70 percent participation rule won’t be enforced during that time. That means you can just cover a couple of employees if you want, and you don’t have to worry about the rest of your employees refusing group health insurance coverage. It won’t stop you from being approved for group health insurance if your business meets all the other group coverage requirements.
You can’t count a spouse
If there is only one other employee joining you for group health insurance coverage, it can’t be your spouse. You would need to apply for a family health insurance plan instead. If you have other employees signing up for group coverage, you can also put your spouse under your group health insurance plan, but it must be in addition to those other full-time qualifying or full-time equivalent employees.
They just won’t count toward your group health insurance requirements, even if they work for the business on a full-time basis. Employees can get their spouses covered by your group health insurance plan, as well. But even with group coverage it may be expensive to cover a spouse.
Sole proprietors need individual coverage
If you’re the only one who works at your company, even if you take a salary and consider yourself an employee, you’re actually a sole proprietor and don’t qualify for group coverage. While you’re still in business, you’re not technically a small business by health insurance’s standards, and you will need to look into options for individual health insurance.
Already have group health insurance?
Are you already a qualifying small business and have been, or are currently covered under a plan you bough from a local broker or on the government exchange? Well, we believe that you should still look at your options for group health insurance with eHealth, as we’ve helped thousands of Americans save, we have online tools to help small business owners find the best plan for them, and we have zero broker fees–so you won’t be spending any more money than you would elsewhere, and you’ll be seeing the largest online selection of small business health insurance. Visit eHealth or get in contact with one of our small business health insurance agents today.