Your Options if You Don’t Meet Minimum Participation

Small employers that don’t meet minimum participation requirements under the Affordable Care Act have a ‘secret’ or little-known window of time in which they can enroll for group health care coverage, but benefit experts say adviser help is imperative to avoid doing employees more harm than good.

The Affordable Care Act requires health insurance issuers to offer an annual one-month special open enrollment period (from Nov. 15 – Dec. 15) to employers in the small group market who do not meet the employee minimum participation or employer minimum contribution requirements.

Many state laws (and federal rules on the Small Business Health Options program, better known as SHOP) allow health insurers to refuse coverage to employer groups that do not meet employer minimum contribution or employee minimum participation requirements, usually 70% of eligible employees. Employer contribution rules require employers to contribute at least a specified percentage of the lowest-cost premium for employee-only coverage.

Kenneth Statz, an adviser and owner of Brecksville, Ohio-based Statz & Associates, says he’s looking at the SEP for several of his groups, and adds that many small employers are not aware of the special enrollment period.

Michael Lujan, chief sales officer at LimelightHealth and president-elect of the California Association of Health Underwriters agrees, saying, “Many employers aren’t aware of it and those that are, know about it through their agent.”

With all of the revisions, additions and changes to the ACA, this special enrollment period has probably gotten “lost in the shuffle” for many employers, he adds.

The pros and cons

The special enrollment period gives small employers who don’t meet the minimum participation or contribution requirements the opportunity to provide an employer-sponsored plan as a benefit for attraction and retention of employees, says Statz. However, he cautions that while it can be beneficial for some small employers, it may not be appropriate for others.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary