Little Known Open Enrollment ACA Small Group Provision.

[Ann H]

The ACA law simply says a group is 2 or more employees. The article makes it appear that there is some sort of extra provision in the ACA law which most agents don't know about, but really it's just that most agents don't understand how you come up with 2 people in a group.

For most states (including AZ), a group must include at least one person who is not the owner nor the owner's spouse. So, in other words, if you want to insure the owner and/or owner's spouse, then you must insure at least one more employee who is paid a W2 wage.

The article referenced a technique where you insure 1 person only, because the owner is on Medicare and doesn't need the group insurance. So, essentially, in that example, the only person being insured is the W2 employee who is not an owner nor owner's spouse. That's fine. However, in most of these situations, the owner wants coverage too.

Some states and carriers have other rules. Some require the W2 employee to work at least 30 hours a week, some say as little as 1 hour a week. Some give extra leniency to Partnerships, S-Corps, and Sole Proprietorships. Some states or carriers say that the other W2 employee must actually exist on payroll, but does not need to be insured. (That loophole has been slammed shut by many states and/or carriers.) There are variations on this theme, but basically, if you have a small group with at least one W2 employee who is not the owner nor owner's spouse, you can do it.

 

[DS4]

The article referenced a technique where you insure 1 person only, because the owner is on Medicare and doesn't need the group insurance. So, essentially, in that example, the only person being insured is the W2 employee who is not an owner nor owner's spouse. That's fine. However, in most of these situations, the owner wants coverage too.

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I probably have 12 groups like this. Owner is over 65, with one full time employee. Owner waives off(Medicare is a valid waiver). Employee enrolls. Owner is 100% better off enrolling in a med supp and Part D

 

[yorkriver1]

I have several written on the ACA end of year special enrollment, where the employees and owner don't have to have a valid waiver, that's one of the ACA exceptions that makes things easier for some. I have to keep reminding the insured owners that if an employee works the # of hours a week required for eligibility:
1. the employee is eligible for insurance and it must be offered
2. the employee isn't eligible for a tax credit on HC.gov unless the employee rate is unaffordable by the ACA rules.
That could possibly be accomplished by employer not contributing to employee premium which is also allowable by the special enrollment at end of year ACA rules, but not by most carriers in ordinary situations the rest of the year.

 

[AllenChicago]

I have several of these groups. In an interesting approach, this article is referring to the employee petitioning the employer to set up a small group plan that benefits the employee in this case. Not bad, compared to employer needing to pay at least 50% of employee premium under most small group rules, as well as minimum participation rules.
Re: employee with pre-tax premiums. If the employee covered isn't the owner, what they are referring to is that that under the ACA rules for this small group exception, the employer is not required to contribute to the employee's premium. The employer can set up payroll deduction (since the insurance carrier's bill to the employer for employee coverage must be paid by the employer as the plan sponsor) and it's a stretch on pre--tax, because it's probably referring to IRS rules for cafeteria plans, a "Premium Only Plan" specifically. That adds a bit of administrative burden to the employer to avoid violating the IRS rules and of course, ERISA is involved too. They would need a summary plan description, and follow all employer benefit plan laws applicable to their size. There are payroll services who have value added programs to administer cafeteria plans and some FMO's, like the one I use for most groups, have a program to offer small employers these compliance services for reasonable fees.
The employer usually can't pre-tax their own insurance premiums if they are insured on the plan, but that's a question for their tax professional to confirm.

OMG! Thank-goodness the ObamaCare client who called me about this seemingly magic "new" health insurance option, changed her mind!

The husband is the owner of the corporation and is also the only employee of the corporation. She "helps" him, but is not officially on the company payroll.

ObamaCare premiums and Out-of-Pocket $$$ has increased so dramatically, that a lot more people are desperate to get away from it. Especially those like my client (family of 4) who earn too much for income for Premium Tax Credits.

Thank-you for the thorough and informative reply, YorkRiver1 !

-Allen

 

[AllenChicago]

This isn’t new.

It’s a 1 person group. If a wage and tax exists, you can do pretty much whatever you want, EXCEPT if it’s husband/wife.

If it’s husband/wife, it’s a carrier specific question, even with the wage and tax.

I have about 75 of these, primarily because TX only has HMO for individuals and this is the way to get a PPO.

I’d call a small group rep at BCBSIL and get the steps for 1 person groups and see if they do husband/wife groups.

Hey KGMom! As usual, you're 100% correct. The annual Illinois BCBS Open Enrollment webinar did a decent job of explaining how it works.

For Husband/Wife, it works if they are legally "business partners".

On a side note, it's horrible what our Illinois (damn Blue State!) governor did to Short Term Medical plans this year. Max duration = 6 months, and can't re-enroll with the same company when the 6 months expires.
Allen in Chicagoland