What Are the Requirements for Getting Small Business Health Insurance?

Small Business

What Are the Requirements for Getting Small Business Health Insurance?

Published on June 01, 2018

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Updated August 2, 2019
In order to qualify for group health insurance, a small business is typically required to have at least one full-time equivalent employee besides the business owner, as well as documents which prove business legitimacy. While requirements vary based on plans and insurance carriers, there are several financial and strategic reasons for small business employers and employees to have group health coverage.
You may not be in on the secret, but small business health insurance is a great way to save on health insurance costs if you qualify. A recent eHealth study on small business health insurance in 2018 found that premiums are significantly lower per individual with small group health insurance plans. And we have even seen trends of very small businesses (who wouldn’t normally provide group health insurance) signing up for a group plan, due to the benefits that come along with group coverage.
So the only question left for those looking into small business health insurance is “How can I qualify for a small business health insurance plan?”

What do you need in order to get a small business health insurance plan?

Each plan and insurance carrier is different, so requirements or paperwork needed might differ slightly depending on the group plan you choose. Luckily, eHealth helps guide you through every step with our streamlined application and enrollment process, so anything you need in order to qualify for small business health insurance will be laid out in a step-by-step process.
There are two basic things you need in order to get a small business health insurance plan:

  • At least one qualifying full-time employee
  • Proof that your business is legitimate

You’ll also need to provide basic information about your small business, including:

  • Business name
  • Type of business
  • Address

What type of employee will qualify me for a small group health insurance plan?

Full-time or full-time equivalent employees, also called common-law employees, are a key to qualifying for group health insurance.
You must have at least one employee other than yourself or a spouse who works 30 days a week, and at least 126 days in the year, according to Healthcare.gov.
Depending on the plan, you may be able to add up two part-time employees to equal one full-time equivalent employee, in order to qualify for a group health insurance plan.
If you’re confused about who counts as an employee, the IRS has guidelines to help define what an employee is.

What documents do you need to prove you’re a business and qualify for small business health insurance?

Some documents that should work to prove your legitimacy as a business include:

  • A current business license
  • Articles of incorporation
  • Most recent full business tax return

This list doesn’t cover everything that might help you qualify, but it’s a good start for what to have on hand when applying for group coverage.

5 reasons why you should want to get small group health insurance

Group health insurance has several benefits for both employees and employers of small businesses, some of which include:

  1. Premium cost-sharing (employer usually pays at least 50% of every employees’ premium)
  2. Lower costs to due risk pooling (larger groups are usually less risky for insurance companies, so are often charged less per individual)
  3. Attracting quality employees, and increasing retention
  4. Keeping everyone healthy (think affordable preventative care, office visits, and prescription drugs)
  5. Protection against financial ruin in the case of serious illness or injury

These few reasons are only on the short-list of why group coverage is a great option for many. If you’re interested in covering a group (even if you only have one employee besides yourself), eHealth can guide you in the right direction with our tools, resources, and streamlined application process.
This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.

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