Group Health Plan Requirements
With open enrollment approaching, DFA Insurance wanted to let you know about an important component of the Affordable Care Act (ACA) that applies to small groups. A small group is defined in most states as an employer with 2-50 employees. CA, CO, NY and VT define a small group as an employer with 2-100 employees.
Insurance carriers typically require two things of employers applying for small group coverage:
- the employer contribute a certain level of dollars (contribution) toward the cost of the health coverage, and
- a minimum percentage of employees actually enroll (participation) in the group plan
The contribution minimum requirement is often 50% of the employee only premium. The participation minimum is usually 75% of eligible employees. Many small employers have difficulty meeting these requirements.
This is where the small group special open enrollment period can come into play. Employers applying for small group coverage between November 15th
and December 15th are not required to meet these requirements.
That means as a condition of eligibility for small group coverage, the employer does not have to have a specific number of employees enroll and the employer is not required to contribute to the cost of coverage. Important to note: if an employer has 50 or more employees, the ACA rules for affordability of coverage still apply. If these rules are not satisfied the employer could be subject to penalty.
Some specifics about applying for small group coverage during the small group special open enrollment period:
- Groups must still be a business eligible for group coverage
- An owner only policy would not be considered a group
- You must have at least 2 employees enrolled to be a group
- There must be at least one common law employee collecting a W-2
- This is only available to the small group market
- Groups must enroll between Nov 15 and Dec 15 for a 1/1 effective date
- Once the group is enrolled, new employees can join throughout the year
- Existing employees can join throughout the year provided they enroll during a normal open enrollment period or the employee is eligible for a special enrollment due to a qualifying event
It’s important to remember, that group plans typically offer better benefits, pricing and provider networks than the individual coverage sold on the “marketplace.” Many major carriers have withdrawn from the individual marketplace - a group plan offered through DFA Insurance could help lower costs and improve access to care.
Please call the DFA Insurance Service Center at 877-466-9089 to learn more about how to take advantage of this special enrollment period.