Is my business eligible for small group health insurance?
Businesses typically have to meet 3 requirements to be eligible for a small business insurance plan:
- There are at least two people in the company
- At least one of those two people is a W2 employee
- The company does not consistent of only a husband and wife
If you are looking for a small business health plan for you and your spouse only, you may still be eligible if you live in the following states: FL, TX, IL, OH, CO, AZ, MS, AL, or GA.
You can start group insurance as long as you meet eligibility even if not all your employees need insurance. (Eligible for coverage? See plans & rates online instantly.)
What are the advantages of small business health insurance versus individual plans?
Small business health insurance is a pre-tax expense, which means you can offer insurance as an employee benefit and have it exempt from employer and employee taxes:
- Business income taxes – the expense paid by the company is considered a business expense and reduces your company’s income taxes
- Employee income taxes – the expense paid by employees is not subject to income taxes
- Payroll taxes – benefits are not considered wages and are not subject to payroll taxes
Combined, these tax benefits can reduce the cost of insurance by 30-40%.
Individual insurance, by contrast, does not provide the same tax benefits and instead must be paid with post-tax money.
When can I start the health insurance plan?
Businesses can start a new insurance plan any month of the year, and most insurance companies begin coverage on the first of the month. Unlike individuals, businesses do not have to wait for an open enrollment period to purchase a new plan.
I have an individual ACA plan. Can I cancel and move to group insurance?
Yes, you can cancel individual insurance at any time and switch to a small business plan since small business insurance can start any month of the year.
You are NOT required to wait until open enrollment to enroll on group insurance or leave your individual insurance.
Do small business plans cover pre-existing conditions?
Yes, all small business plans cover pre-existing conditions. In addition, having a pre-existing condition does not impact the price you pay or ability to sign up for a plan.
Can businesses get a discount if more people sign up?
No. The monthly premium for each employee is based on two factors:
- The age of the enrolling employee and their dependents (unless your company is located in NY)
- The zip code of the employer or the employee
Every company gets charged the same rate for an employee of a specific age regardless of the company size or number of employees enrolled.
How many employees have to join a small business plan?
As long as you are an eligible business, you can start a plan with as few as one employee enrolled in coverage.
How does my company pay for health insurance?
For companies, insurance premiums are billed on a monthly basis. Most insurance companies will use auto-debit/ACH for the monthly premium, but may require a physical check for the first month.
The company always pay for the entire invoice each month, and if employees are paying for part of the insurance, their portion gets deducted from their wages each pay period.
How do my employees pay for their insurance?
If your employees are paying for a portion of their insurance costs, their share of the premiums is deducted from their wages each pay period.
What happens when an employee quits/leaves?
If an employee leaves your company or wishes to leave the insurance for whatever reason, they can be removed at any time during the year, and you will no longer be charged for their insurance.
Can owners of a company enroll?
Yes! Owners of small businesses can enroll as long as the group is eligible, and the owners can provide documentation proving they are owners of the company.
Appropriate documentation can include:
- Personal tax return forms showing profit/loss from the company
- If it is a new company with no tax returns, the company’s legal formation documentation showing the person as an owner would suffice.
Is there any price difference between a spouse/child vs. employee?
Pricing for medical insurance is only based on age and is not based on whether the person is an employee/dependent/spouse.
For example, a 30 year old spouse on your plan would cost the same as a 30 year old employee. A 21 year old child would cost the same as a 21 year old employee.
Do I have to offer my insurance to all my employees?
You do not have to offer insurance to all classes of employees, but if you do decide to offer insurance, you must treat all employees in each class the same.
- Example 1: If you have part-time hourly employees, you may choose not to offer the company’s insurance to them and only offer the insurance to your full time employees.
- Example: 2: If you choose to offer insurance to your full time employees, you cannot exclude offering insurance to one of the full time employees for any reason.