These are the most common issues we find in our experience of enrolling California Small Groups (2-50 employees) in California health insurance.

By law, California group health insurance is Guaranteed Issue.  This means they cannot decline coverage for 2-50 employee sized companies based on health and they can go no more than 10% higher than the standard rate (also called the RAF or Risk Adjustment Factor).  In order to qualify for this, there are three main requirements that frequently come up. 

1)  We need at least two people formally tied to the company for half of the prior calendar quarter.  This is the snag for small companies (mom and pop) and for brand new companies.   The enrollees must show on either the DE6 or Officer Statement.  Sometimes, a small family business will have a sole-proprietorship and the spouse is not on payroll.  In this case, there is only one person officially tied to the company (via sole proprietorship) even if they are married. 

"half the prior calendar quarter".  This is critical for newer companies.  For people on the DE6, they will look to see their payroll started before this timeframe.  For example, if we want an October 1st effective date or later, we need two people formally tied (DE6/payroll and/or Statement of Information) before August 15th.  For Jan 1st, we need two before Nov 15th and so on.  Let's say your Statement of Information is stamped by the State August 20th for Officers.  The company would have to wait till Jan 1st (not qualified for the October 1st).  Let's say that two employees show on payroll starting August 5th.  We could then qualify for the October 1st.  This part can be confusing so please contact us with your particular situation and we can quickly size it up.

Out of State or Foreign Corporations.  Some companies incorporate in other States.  They need a Certificate of Qualification within California which essentially allows them to do business here.  The carrier will go based on when that is filed...not the original incorporation.

LLC's.  The carrier will go based on the start of the LLC (State stamped date) if it lists the Managers (need at least two enrolling). 
 

2) We need at least 75% of the eligible employees to go with the plan.   This comes up with small to mid-size groups where employees are declining coverage.  Some quick notes on the definition of "eligible".

1099's  1099 or contract employees are not considered eligible for California group health insurance

Part Time  Employees working under 30 hours weekly can be included or not depending on what the group chooses.  If the company chooses to cover part time, they then figure into the 75% calculation

On other Group Plan.  Employees on another qualified Group health plan are not part of the eligible pool.  They will still need to decline coverage via the employee application mentioned above but they will not affect our 75% calculation.

Where we see an issue on this requirement is when we have 3 employees who want to enroll and 2 who do not (and they do not fall under the above waivers). 

A side rule to this is the majority rule in California for companies with employees in other states.  At least 51% of total (not just eligible) employees need to be California.

 

3) The company must pay at least 50% of the employee premium. 

 

This requirement does not apply to dependent coverage.   Some carriers allow a fixed dollar contribution or a fixed percentage of a given plan.  Anthem Blue Cross pioneered this approach and it has been very popular with the Employee Elect program.  The main concern is that the company applies the same rule to all employees and does not discriminate contributions for eligible employees.