As an Employer, Who Do I Have to Offer Coverage to and When?

Who do I have to offer coverage to?

If you're an employer offering a small business health insurance plan, you will need to offer coverage to all of your qualified employees. A qualified employee is a W-2 employee that works at least 30 hours per week. You cannot offer coverage to just some qualified employees and not others. On the same note, even if you know an eligible employee will be waiving coverage, you will still need to add them to your company’s dashboard. The employee will need to decline enrollment with a signature to show that they were given the option to enroll.

You may also offer coverage to 1099 employees, but it is not required. A 1099 employee is an independent contractor that does not have taxes automatically withheld from their paycheck. If you offer coverage to one 1099 employee, you must offer coverage to all 1099s.

Note: In order to be eligible for a small business health insurance plan, you are also required to contribute at least 50% towards your employees' premiums. You may choose to contribute a percentage to your employees' dependents as well, but it is not required.

When do I have to offer coverage?

A probationary period is the amount of time a new hire must wait to enroll in the company healthcare plan.

It is up to the company to establish its own policy on probationary periods, which can be changed annually during open enrollment. Coverage must start on the 1st of a month.

If you choose to offer a health insurance plan, you must offer it to all eligible employees within 90 days of their employment start date per the Affordable Care Act.

Example: Your company hires an employee to start on January 8th.

• Immediate enrollment: The employee will have coverage beginning January 1.
• 1st of the month after hire: The employee will have coverage beginning on February 1.
• 30 day probationary period: The employee will have coverage beginning on March 1.
• 60 day probationary period: The employee will have coverage beginning on April 1.
• 90 day probationary period: The employee will have coverage beginning April 1.*

When you add an employee to your company dashboard, they will have 30 days from the addition to fill out their individual application. Make sure to add the employee within 30 days of the date of eligibility.

If you’d like more information, the IRS guidance on 90-day waiting period limitation under the Public Health Service Act may be helpful: https://www.irs.gov/pub/irs-drop/n-12-59.pdf

*Coverage must begin on the 1st of a given month. Waiting until May 1st would exceed the 90 day maximum and may result in a fine.

If you have any questions about this, please submit a request to our customer care team at the link below:

https://support.simplyinsured.com/hc/en-us/requests/new