Two rules trip up more small businesses than any others when they apply for group coverage: how many employees have to enroll, and how much the employer has to pay. Knowing both before you apply saves you from a declined application or a scramble at enrollment time.
Carriers require a minimum share of eligible employees to enroll in the plan, commonly somewhere between 50% and 75% depending on the carrier. The idea is to keep the group from enrolling only the people who expect high claims. Employees who have other coverage, such as through a spouse, Medicare, or TRICARE, are usually excluded from the count when they waive, which makes the requirement easier to meet than it first looks.
Employers must also pay a minimum share of the premium, and carriers commonly look for at least 50% of the employee-only premium. Dependent coverage is usually optional for the employer to subsidize, so many businesses pay a larger share for the employee and let the employee cover the rest for family members.
Eligibility is set by your plan, but full-time employees are the usual group, defined under the ACA as working an average of 30 or more hours a week. Federal rules also cap any waiting period before coverage starts at 90 days, so you can set a short wait for new hires but not a longer one.
Federal rules let carriers limit enrollment for groups that do not meet participation or contribution requirements to an annual window of November 15 through December 15. That window falls right in the middle of renewal season, which is another reason to start early. Our renewal timeline shows how to plan around it.
You have options. You can raise the employer contribution, collect waiver forms that document employees' other coverage, or look at an ICHRA or QSEHRA, which work differently from group plans and do not have participation minimums. We compare them in our ICHRA vs QSEHRA vs group plan guide.
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It varies by carrier, but 50% to 75% of eligible employees is common. Employees with other coverage are typically excluded from the count when they waive.
Carriers commonly require the employer to contribute at least 50% of the employee-only premium. Dependent coverage usually has no minimum employer share.
Federal rules limit waiting periods to 90 days before coverage must begin for eligible employees.
Carriers can limit you to an enrollment window of November 15 to December 15. Raising your contribution, documenting waivers, or using an ICHRA or QSEHRA are common fixes.
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