WHO ARE ELIGIBLE EMPLOYERS & EMPLOYEES IN A GROUP HEALTH INSURANCE PLAN?

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What is an eligible employer and eligible employee?

An eligible employee is usually a W2 employee who works 30 or more hours per week.  The employer can redefine an eligible employee to be a W2 worker who works over 20 hours a week. Some, but not all insurance companies may also allow 1099 independent contractors to be considered eligible employees.  Owners not on payroll are also eligible. Employers should establish a “waiting period” for a new eligible employee to be covered which can last no more than 90 days from their hire date.  Employers with high turnover may want to have employees start coverage “the first day of the month following 60 days of employment”.  Employers who do not expect much turnover of employees may wish to have coverage start earlier, like the first of the month following 30 days of employment or even coverage starting the first day of the month following date of hire.  At the beginning of a group plan, the employer has a one time option to either require employees to meet the waiting period, or “waive” the waiting period so all eligible employees can enroll or decline coverage.

An eligible employer is more difficult to define.  First of all, the firm must have filed articles of incorporation with the State of California. Be prepared to show a copy of your articles with owners names and percentage owned when you are ready to enroll with a specific insurance company.  Secondly, the firm must have at least one W2 employee on payroll.  A husband and wife group plan where they are the only employees poses a major problem.  They need at least one W2 employee such as a son, daughter or another person.  Insurance companies usually require copies of payroll reports for 6 weeks or a copy of your last quarterly DE9c form that you file with the state of California so it shows the employees on payroll.

 

Employer Eligibility

Small Group Qualification/Guarantee Issue Guidelines
Aetna 1-100 eligible FT/PT W2 employees for 50% of the preceding calendar quarter or year. The group cannot be comprised of owner(s) and spouse(s) only. Note: The W2 can be the same or opposite sex domestic partner.
Anthem Blue Cross Sole Proprietors and Partnerships – 1-100 FT/PT W2 EEs for 50% of the preceding calendar quarter or year.  Cannot be comprised of owner(s) and spouse(s) / domestic partner(s) only.

Corporations & LLCs – 1-100 FT/PT W2 EEs or 2 owners for 50% of the preceding calendar quarter or year. Cannot be comprised of owner(s) and spouse(s) / domestic partner(s), a 2% S-Corp shareholder, or a leased employee.
Blue Shield of California Sole Proprietors – 1-100 eligible FT/PT W2 employees for 50% of the preceding calendar quarter or year. Cannot be comprised of owner(s) and spouse(s) / domestic partner(s) only.

Partnerships, LLCs, and Corps – 1-100 eligible FT/PT W2 employees for 50% of the preceding calendar quarter or year. Note: W2 can be the spouse / domestic partner of the owner as long as they are not an owner themself.
CaliforniaChoice 1-100 Eligible: See guidelines below based on number of employees enrolled.

1 enrolled: 

  • If group consists of 1 FT/PT eligible common-law EE, the common-law EE must have 6 weeks of payroll

2 enrolled:

  • At least 1 FT/PT common-law EE with a minimum of 6 weeks of payroll
  • 2nd common-law EE will require payroll from date of hire to current. If not available, at least 1 week of payroll is required with the balance to complete a month due by the last day of the month of the requested effective date.
  • If group consists of an owner and a FT/PT common-law employee, owner documents and 6 weeks of payroll for EE are required
  • There must be at least 1 FT/PT common-law EE in a 2-life group

3-4 enrolled:

  • At least 1 FT/PT common-law EE for 6 weeks with a minimum of 6 weeks of payroll
  • The other EEs would be required to be on payroll for at least 1 week on or prior to the effective date from start date to current, whichever is greater
  • Remaining payroll to complete 1 month is due by the last day of the month of the requested effective date

5+ enrolled:

  • Majority (3 out of 5) enrolling are FT/PT common-law EEs
    • Payroll from start date to current. If not available, at least 1 week of payroll is required for approval. Balance of payroll to equal a month required by last day of the month of the effective date (contingent approval)
    • Owner docs
  • Majority (3 out of 5) enrolling are owners:
    • 1 FT/PT common-law EE on payroll for 6 weeks
    • Owner docs (if owners are not on payroll with eligible wages)
  • Remaining payroll to complete one month is due by the last day of the month of the requested effective date month

Note: Effective 2018 – Groups will no longer be allowed to move off anniversary between CaliforniaChoice and Kaiser Permanente.
Covered CA for Small Business 1-100 eligible FT W2 employees on payroll for a minimum of 30 days. Cannot be comprised of owner and spouse / domestic partner only.

 

Note: Groups with 2 weeks of payroll can be reviewed on an exception basis.
Health Net 1 – 5 Active Subscribers: 1-100 eligible FT/PT W2 EEs for 50% of the preceding calendar quarter or year. Cannot be comprised of owner(s) and spouse(s) / domestic partner(s) only.

 

6+ Active Subscribers: 1-100 eligible FT/PT W2 EEs for 4 weeks. Cannot be comprised of owner(s) and spouse(s) / domestic partner(s) only.
Kaiser Permanente Sole Proprietors, Partnerships & LLCs (single-member LLC): 1-100 FT and FTE for at least 50% of working days of the previous calendar quarter or year. Cannot be comprised of owner(s) and spouse(s) / domestic partner(s) only.

 

Corporations & LLCs: 1-100 eligible FT/PT W2 employees or 2 owners (1 owner may be considered a W2 or common-law employee when on payroll with deductions) for at least 50% of working days of the previous calendar quarter or year. W2 employee cannot be the spouse or domestic partner of owner(s).

Note: Groups breaking away from a Kaiser union will be reviewed on an exception basis.

Effective 2018 – Groups will no longer be allowed to move off anniversary between Kaiser Permanente and CaliforniaChoice.
MediExcel 1-100 eligible FT/PT W2 employees on payroll for a minimum of 30 days. Cannot be comprised of owner(s) and spouse(s) / domestic partner(s) only.
Sharp Health Plan 1-100 eligible FT/PT W2 employees for 50% of the preceding calendar quarter or year. Cannot be comprised of owner(s) and spouse(s) / domestic partner(s) only.
UnitedHealthcare Sole Proprietors, Partnerships & LLCs (single-member LLC): 1-100 eligible FT/PT W2 employees (or 1099*) for 50% of the preceding calendar quarter or year. Cannot be comprised of owner(s) and spouse(s) / domestic partner(s) only.

 

Corporations & LLCs: 1-100 eligible FT/PT W2 employees (or 1099*) or 2 owners for 50% of the preceding calendar quarter/year. Cannot be comprised of owner(s) and spouse(s) / domestic partner(s) only.

 

Note: Employer eligibility in the small employer market shall be determined using the method for counting full-time employees and full-time equivalent employees.

*The employer must have at least one owner or regular, taxed employee who is eligible for coverage (they are not required to enroll). See Employee/Dependent Eligibility: 1099 Employees section for additional details.
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