It’s not easy for small businesses to provide health care benefits. It’s expensive to offer group health insurance because the premiums are high, and if you don’t have enough employees to meet the participation requirements—or 70% of your employees—you aren’t even able to opt into a group health plan. 

Luckily, there’s a little-known enrollment 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. 

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

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 insurance plans for their employees through two different factors. This is known as the Special Enrollment Period. 

The first difference in this enrollment period is that the employer contribution is not required. 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 minimum participation is required among your employees in order to qualify. 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 have access to group health insurance (and provided that you set up a cafeteria plan), they’re able to use pre-tax payroll deductions to pay for their premiums, and they 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 also important to discuss your strategy with your broker before you decide how much you want to contribute to premiums, if you choose to do so. While the Special Enrollment Period does not require you to contribute, the decision to contribute nothing at all may impact whether or not your employees choose to waive group coverage and opt for individual insurance instead. 

Bottom line

The best route to take before applying for Special Enrollment is to weigh your options with a professional and take the time to decide if you want to contribute anything to the premiums, and prepare ahead of time. If you do it right, you’ll start the next year offering a crucial benefit to your employees and potentially increasing your retention rate in the long run. 

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

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