Group health insurance can often be less expensive than individual plans that offer the same benefits and coverage options. however, not everyone qualifies for group coverage plans. If you have a small business, you’ll want to determine if you qualify for group health insurance before you apply for coverage. The following information about health insurance for two or more employees will help you make informed health insurance decisions for you and your employees.
How many employees do you need for health insurance?
To be eligible for small business health insurance, a business must have between one and 50 employees. that is considered a small business for purposes of purchasing group health insurance. If you have more than 50 employees, you must:
- request coverage for large groups
- meet group coverage reporting requirements
- meet minimum group health insurance standards
- not owner or employer
- not the spouse of an owner or employer
- not a family member of the owner or employer
- not a partner of the owner or employer
- not a seasonal worker hired on a temporary basis, even if the person works full time during that period
- generally not a contractor of the owner or employer (contractors are generally not considered common law employees because the owner of the business does not normally oversee how the contractor does the work)
- full-time employees are employees who work for you at least 30 hours per week.
- full-time equivalent employees are employees who are not full-time, but who, in the aggregate, are the equivalent of one full-time employee. For example, 3 employees working 10 hours per week each equals 1 full-time employee for purposes of determining eligibility for small business group health insurance.
- the work the person does
- the way the person does the job.
the type of employees matters
One of the employees of the group health insurance plan may be the employer or the owner. however, at least one other non-owner employee must exist and enroll in the group health plan. that other employee must be someone who is:
Who is considered an employee?
As a small business owner, you need at least one employee besides yourself to qualify for small business health insurance. Specifically, your workers must be full-time or full-time equivalent employees. To get group coverage, your employees must follow these guidelines set by the IRS:
Your employees must also pass the common law test. According to the IRS, a person who works for you would pass the common law test if the small business owner has control over both:
Therefore, a worker is considered to be an employee of your small business if you direct both the work process and the finished product.
small business health insurance with 2 employees: get the facts
If you wish, you can offer group health insurance to temporary and part-time workers. But it’s important to understand that you generally must enroll at least 70 percent of your full-time employees without insurance. If some of your employees have other individual or group health insurance coverage, they don’t count toward the 70 percent rule.
and there is a caveat to the 70 percent rule. If you enroll in small business group health insurance from November 15 to December 15 of the year, the 70 percent participation rule does not apply. You may be approved for small business group health insurance with less than 70 percent of your eligible full-time right now. Applying for small business group health insurance during this period may be an advantage if you are concerned that one or more eligible employees will decline health insurance coverage and disqualify the business for small business group health insurance.
an ichra can be an attractive alternative to group health insurance for small businesses
Several years ago, the federal government implemented a new type of HRA called the Individual Coverage Health Reimbursement Arrangement, or ICHRA. Ichra are defined contribution employee benefits. ichras allows all companies, regardless of size, to reimburse employees for health care expenses. This means your employees can choose a health insurance plan that works best for them. then you can reimburse them for qualified health care premiums and costs tax-free up to an amount you define. There are no unpredictable costs to strain your business budget like there can be with small business group health insurance. and there is no minimum number of employees that must participate in ichra.
Through an ICHRA, your employees receive tax benefits comparable to those received by employees who are enrolled in employer-sponsored health plans. This is because the refundable allowances you establish for your employees under the ICHRA are tax-free. and your employees have the freedom to choose their own health insurance on or off the Marketplace each year.
sole proprietors need individual coverage
If you’re the only one working at your business, you’re actually a sole proprietor and don’t qualify for small business group health insurance (even if you’re paid and considered an employee). If you are a sole proprietor, you will need to look into individual/family health insurance options. this is also the case if you and your spouse are the only employees of the company. however, you can enroll your spouse as your dependent if you qualify for small business group health insurance because you have at least one other full-time, unrelated employee participating in the plan.
Already have small business group health insurance?
Already a qualified small business? You may have purchased small business group health insurance in the past from a local broker or through your state Small Business Health Options Program (Store) Marketplace if you currently have or would like to have small business group health insurance , ehealth wants to help you explore your options and find the right plan for the right price. There is no obligation to buy or broker fees if you use eHealth. feel free to use our online tools designed to help business owners and individuals find the best plan to meet their needs. or contact one of our licensed insurance agents for assistance.