What are the Participation and Contribution requirements?
How many employees have to enroll and how much does the boss have to pay?
Premium & Contribution Minimums
All the Insurance Companies have participation & premium contribution rules as they are REQUIRED to write your company under Health Care Reform (AB 1083 ♦ §10753 et seq. Non Grandfathered Plans) regardless of the health status of the owner, employees or dependent and want to make sure that they get young & healthy employees along with those more prone to claims.
If an employer is not covering the employees… the health plan might not qualify as tax deductible business expense under IRS Code Section §106. The employer may require the employee to pay part of the premium, which can be deductible under a POP Plan IRC §125.
What are the rules of minimum participation & contribution?
Check the EmployER application, brochures & each carriers manuals We are happy to help you with that. Just email us [email protected], get an instant quote and/or schedule a Zoom or Face to Face meeting.
Check out the Option during Annual Open Enrollment 11.15 to 12.15 where there are NO Participation rules!
Legal Mandate for Participation & Premium Contribution
Insurance Code §10753.06. (Health Reform – Non Grandfathered Plans)
Every carrier shall file with the commissioner the reasonable participation requirements and employer contribution requirements that are to be included in its health benefit plans. Participation requirements shall be applied uniformly among all small employer groups, except that a carrier may vary application of minimum employer participation requirements by the size of the small employer group and whether the employer contributes 100 percent of the eligible employee’s premium. Employer contribution requirements shall not vary by employer size.
A carrier shall not establish a participation requirement that
(1) requires a person who meets the definition of a dependent in subdivision (e) of Section 10753 to enroll as a dependent if he or she is otherwise eligible for coverage and wishes to enroll as an eligible employee and
(2) allows a carrier to reject an otherwise eligible small employer because of the number of persons that waive coverage due to coverage through another employer.
[some carriers will reject if the person waiving is the ONLY common law employee – call or email for your situation]
[Health Reform §2708 42 US §300gg requires that Employees be eligible within
90 60 days. DOL Guidance 2012-02 national underwriter.com Health Reform Facts Q & A 249 (email us for a copy) Learn More⇒ Our Page on waiting periods]
Definition – Minimum Essential Coverage 5000A (f)
Please note that while the law mentions that an employee that is covered under another group plan (spousal) doesn’t count towards the participation level, the practice has been, to include Medicare, VA – Veteran’s, for many companies, EVEN individual plans and Medi-Cal etc.
There is an Special Open Enrollment Period from November 15th to December 15th every year where a Small Group can enroll without meeting participation or contribution requirements. “Final Rule” (2.27.2013 13416 Federal Register Vol 78 gpo.gov *
The Prohibition of Management Carve Outs – Section 2716 Health Care Reform – while not presently enforced, requires that you must treat all employees the same, and must still offer insurance to all employees… I don’t think this provision is that big a deal, as at renewal, you MUST meet the participation & contribution rules!
Although carriers must lower their contribution requirements, the Affordable Care Act still mandates that Applicable Large Employers (ALEs) with 50 or more full-time plus full-time equivalent employees must offer affordable coverage that meets minimum value in order to avoid a §4980H(b) employer penalty.
California requires Individuals and Families to have coverage or face a tax penalty, just like the Federal Law did.
Email us for more information
(B) In the case of a group health plan in the small group market that cannot comply with employer contribution or group participation rules for the offering of health insurance coverage, as allowed under applicable State law, and in the case of a QHP offered in the SHOP, as permitted by § 156.285(e) or § 156.286(e) of this subchapter, a health insurance issuer may restrict the availability of coverage to an annual enrollment period that begins November 15 and extends through December 15 of each calendar year. Cornel 45 CFR 147.104 *
Health insurance carriers are not required to renew existing small group clients who do not meet minimum participation requirements, but only to take new ones. However, carriers generally will renew existing plans because otherwise they would just be circulating these clients from carrier to carrier. Levitt.com *
Annual Proof that you’re in compliance with
On the other hand, there is a Special Enrollment from November 15th to December 15th, when an employer can enroll without having to meet participation or contribution requirements. One would have to check with each company to see if they would do an audit at renewal.
Here’s some information on what Renewal enforcement might consist of:
Do you have a high enough percentage of employees covered?
Are you a bonified business?
Questions about your Eligibility Audit?
Kaiser Recertification Booklet
Rev May 2019
EDD California Employers Guide #DE44
- Forms & Publications EDD
- More workplace protections in 2022 New laws will shield employee health, safety and wages, but some ‘job killer’ bills were axed Los Angeles Times
- dir.ca.gov/faq_minimum wage
- shouse law.com/minimum-wage-law
- Employing Family Members Publication # DE 231
- dir.ca.gov/faq_overtime exemptions
- FORMS REQUIRED TO GIVE NEW EMPLOYEES
- Health Insurance Enrollment
- Rivera Employment Law
- EDD New Hire Registry
- Form W-2, Wage and Tax Statement Employer Files on behalf of employee
Health Coverage #Guide .org
- What Is Group Coverage?
- Is Insurance Required?
- Is Your Business Eligible for Group Coverage?
- Who Is Eligible for Coverage?
- What Do Employers Have to Pay?
- Avalara Tax Compliance Guide for Business 2022 151 pages
- resilience compass.org Find business resources that you need
- Health Care Reform Explained Kaiser Foundation Cartoon VIDEO
- Choosing a Health Plan for Your Small Business VIDEO DOL.gov
Some Insurance companies might consider the non union employees as guaranteed issue, if the employer is mandated under a collective bargaining agreement to contribute to Union Labor Fund. Blue Shield Quick Underwriting Guideline Page 5
Extra 6 week or more waiting period for Part Timers SB 1790 – Insurance Code §10700 f 1 d
Related Pages in Participation & Contribution Requirements Section
- Participation & Premium Contribution Requirements
- Documents to show bonafide Employer in business
- Management Carve Outs – §2716 – Similarly Situated