Does My Business Qualify for Group Insurance?

Does My Business Qualify for Group Insurance?

Group insurance can be an affordable and beneficial way to provide health insurance for employees. However, many small businesses don’t realize that their company qualifies as an eligible group; unfortunately, statistics show that 75% of small businesses don’t offer group benefits because they aren’t aware of their options.

If this sounds like something you want to explore, you first need to figure out whether or not your company qualifies for group insurance coverage. With this in mind, here are key signs that your business might qualify for group insurance in the near future.

What Is Group Insurance?

A group health insurance plan, also known as employer-based coverage, is an insurance plan offered by an employer. A group health insurance plan will be much more affordable because it spreads the risk over a larger number of members.

Insurance companies must offer coverage to organizations with at least two employees. As a result of the Affordable Care Act, companies with fifty or more full-time employees have to offer health insurance to their full-time employees and their dependents under the age of 26. Some states allow self-employed people to qualify for group coverage as well.

The choice and purchase of group health insurance plans are the responsibilities of a company or an organization, which then offer it to their employees. In most states, the minimum participation rate for a group insurance plan is 70%, though some states have higher or lower minimums.

Qualification Requirements for Group Insurance

A business is eligible for group health insurance when it meets two requirements

  • There needs to be at least one qualified full-time employee in the company, excluding the business owner and spouse.
  • The company must be registered as a legal business entity by following the specific regulations of their state.

According to the Affordable Care Act (ACA), a small business is a business that employs from 1-50 employees. Qualifying employees, who are not the owner or spouse, may make the business eligible for group insurance.

There is no universal definition of a group or employee. But it is important to know that a qualified or full-time employee is considered to work at least 30 hours per week, according to the IRS.

If you’re a small business owner and do not provide health insurance coverage to your employees, you can enter into an Individual Coverage Health Reimbursement Arrangement (ICHRA) in lieu of group health insurance or group health insurance. Contact Goldstein Healthcare to learn more about group insurance.