Small Group Special Enrollment Period: what you need to know

It’s not easy for business owners to offer health insurance. It’s expensive to offer coverage because the premiums are high, and if you don’t have enough employees (70% of your staff) to meet the participation requirements you aren’t even able to opt into a group health plan. But did you know there’s a window under the Affordable Care Act (ACA) known as the Special Enrollment Period

Let’s dive into what that means for businesses in the small group market. 

What is the small group Special Enrollment Period? 

Insurance carriers are required by the ACA to offer a one-month period—November 15 to December 15—each year where businesses can afford to offer health coverage to their employees through two different factors. This is known as the Special Enrollment Period. 

The first difference in this enrollment period is that you as the employer do not have to contribute. This means that your business does not have to contribute to the employee premiums, making it less costly for you. 

The other benefit to the period is that it requires minimum participation among your employees in order to qualify for a special enrollment opportunity. By minimum, we mean that instead of relying on 70% of your employees to enroll, you only need one of your staff members to sign up to establish your plan. 

This is good for you because it means that small employers don’t actually have to spend any money at all when offering this crucial benefit, and it’s great for your employees because they will have group health insurance. 

When employees can access group health insurance (assuming that you set up a cafeteria plan), they can use pre-tax payroll deductions to pay for their premiums. They also gain a larger network of doctors and hospitals. 

What else should I know? 

The most important factor to remember when preparing to set up your group health insurance plan during the Special Enrollment Period is that you have to act fast. 

You must have all employees enrolled and everything finalized by December 15 in order for the coverage to kick in on January 1, so start the conversation about your options with an insurance broker sooner than later so you have all of your ducks in a row. 

Speaking of an insurance broker, it’s difficult to find much information online about how to apply as a small business, so it’s necessary to utilize the services of a professional instead of going at it alone. 

It’s important to discuss with your broker before you decide on a contribution plan. The Special Enrollment Period does not require you to contribute. However, the decision to not contribute may prompt your employees to waive group coverage and opt for individual insurance. 

Bottom line

The best route to take before applying for Special Enrollment is to weigh your options. Speak with a professional and take the time to decide if you want to contribute anything to the premiums. Prepare ahead of time.

If you do it right, you’ll start the next year offering a crucial benefit to your employees. This added perk could potentially increase your retention rate. 

Remember, this is not official legal advice. If you have questions about the ACA, it’s best to consult an employment lawyer. 

Related posts

The complete year-end payroll checklist for small businesses

Year-end payroll: It’s a doozy, especially when you’ve got so much on your plate with the holiday rush at the…

Read article

Federal labor laws: What’s new in 2022?

The start of the new year brings both new state laws and federal regulations for employers to follow. Some federal…

Read article

COVID vaccine mandates by state: requirements and bans

The federal government’s COVID vaccination requirement legislation is currently on hold. However, many state and local legislators are implementing their…

Read article

California labor laws: a list of 2022 changes

The new year will bring an onslaught of California labor law changes after a busy legislative session. From COVID-19 reporting…

Read article

5 common wage and hour mistakes every employer should avoid

As a small business owner, you know that failing to pay your employees in accordance with the Fair Labor Standards…

Read article

2022 non-compete agreement law changes by state

A non-compete agreement (or non-competition agreement) is a legal contract from an employer. It prevents an employee from entering into…

Read article