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.
Remember, this is not official legal or insurance advice. If you have questions about the ACA, it’s best to consult your health insurance broker or 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 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.
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.