For a brief window of time, small businesses and nonprofits can enroll in a small group health plan without meeting all the minimum requirements. The Affordable Care Act has a special provision to encourage employers to offer a small group health plan to see if it is right for the employees and the owners. Consequently, some of the rules have been waived so that small groups can test the waters.
Special Small Group Guaranteed Availability
From November 15th – December 15, 2015, insurance carriers offering small group plans in California must accept your business even if the group doesn’t meet minimum participation or contribution levels. All paper work must be submitted by December 15th for a January 1, 2014 effective date.
Only a couple employees enroll
For example, a small non-profit or small business has ten employees eligible for enrollment. A usual participation requirement from an insurance company would be 70% or 7 of the 10 employees must sign up for the group plan. Under the small group special enrollment period, if only 3 of the 10 eligible employees enroll, the insurance carriers must still accept the group.
Cautious employer contribution
Another example of waived requirements under the special enrollment period (SEP) is the employer contribution. Small group health plans through Covered California require a 50% employer contribution to the health insurance premium of each employee. Under the SEP, an employer may elect to make a 25% contribution and the insurance carrier would still have to accept the group. A contribution of less than 50% will not make the owner eligible for the tax credits under the ACA, but the group would still be underwritten.
More bang for the buck over individual plans
Group health insurance plans offer more benefits than individual and family plans. Small group plans usually have a larger network of physicians, hospitals and other providers to select from. There are more vision and dental plans for the employees to choose from. Contributions by the employee to their health, dental and vision plans can be pre-tax dollars lowering the taxes paid by both employee and employer.
One year test drive
Under the special guaranteed enrollment provision, groups will be given a twelve month contract. At the end of the period they will have to be re-certified as being in compliance with the minimum standards. The hope is that the employers and the employees will see the overall benefits of having a small group plan and meeting the minimum requirements will no longer be a problem in the next year. In a sense, this is like taking an extended test drive of a small group health plan to see if it has a better ride and gas mileage than individual plans with out a full down payment to purchase it.
*Small groups of private or nonprofit organizations are 50 full-time employees or less. Minimum requirements for a small group plan are two employees. Small groups are eligible for special ACA tax credits with a minimum employer contribution to the employee only premium of 50%