BY TERRY SAVAGE
More than 25 million Americans work for small businesses that don’t offer health insurance. Many of those workers earn too much to qualify for a subsidy under the Affordable Care Act. So they and their families are literally priced out of the health insurance market.
However, these small businesses (employing from 1 to no more than 50 people) now have a one-month opportunity to get the very best group insurance available — at no cost to the business and without participation requirements!
It’s called the Small Business Special Enrollment Period (SEP), and it runs from November 15 through December 15 for coverage starting in January 2018. Here’s how and why it works.
A special small business deal
Typically, when a small business offers group insurance to its employees, the company must pay a portion of the premium and the cover a certain percentage of eligible employees. But during the SEP, those requirements are waived. And the business can have as few as two employees to take advantage of this opportunity.
The law says insurers must offer these small businesses the same choice of excellent plans, broad networks and low copayments as they offer to the best businesses in the same area.
The employer doesn’t have to participate or contribute to premiums. And employees don’t have to participate. (For example, a given employee may be covered by a spouse’s plan or by Medicare.) But if the employee does decide to join this group plan, all the insurance premiums can be paid on a pre-tax basis — along with any deductibles and copayments, which can also be paid pre-tax through a health savings account or flexible spending account.
When you total up the value of the tax deductions for all insurance costs, it’s as good a deal as a subsidy. And these plans typically offer a much wider range of providers and coverages than plans purchased on the health care exchanges.
Best of all, for small businesses or partnerships, only one employee is required to sign up to get the group plan deal! Insurance expert Allen Wishner, who brought this special deal to my attention last year, says the rules have changed a bit since last year, when many businesses rushed to set up plans at year-end.
To set up one of these small business plans for the 2018 insurance plan year, an existing business must have had at least one part-time or full time W2 employee on the payroll for an average of 12 months in calendar year 2017, in addition to the owner. Eligibility must be documented with quarterly wage and tax statements. Part-time workers are eligible, but only if they worked a full year. Some plans allow contract workers (1099) to be covered as well.
There is an exception, however, for companies newly formed in 2017 (and that could include companies formed in the next few weeks). These companies must present their articles of incorporation, LLC forms or partnership agreement to confirm their status. And they must have paid the employee(s) and deposited the corresponding withholding tax before they enroll in a plan. At least two weeks of payroll documentation must be completed before applying.
In other words, newly formed companies or partnerships must take action immediately to get their plans submitted before the December 15 deadline!
Of special note: A business owned by an individual and his or her spouse, with no other employees, may be eligible to purchase group coverage if it is officially established as a partnership with a signed partnership agreement.
Finding a plan
If you work for a small business that doesn’t offer coverage, show this column to the boss. Obviously, if the company’s advisers haven’t pointed this out already, the company needs better advice.
You can get help finding a plan at www.eHealthInsurance.com. Click on the tab that says “Find Insurance for Your Business” to compare plan offerings instantly.
Anthony Lopez, who runs this segment for eHealth, says the company is ready to handle the rush of helping many thousands of small business customers shop and file last-minute plan applications — a process should take no more than two business days.
For this past year, eHealth says the average small business health plan cost about $286 per month per covered life (i.e., about $1,000 per month for a family of four), with an average annual deductible of $2,300. And remember, these plans include the broadest network of providers and choice of types of coverage and deductibles. That makes them an attractive alternative to ACA exchange plans.
Here’s a chance for the small business boss to be a hero by giving employees a health insurance benefit that won’t cost the company a dime. Surely that’s worth investigating.